10-K

FORM 10-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2017

Commission file number 0-20713

CASI PHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)

Delaware	58-1959440
(State of Incorporation)	(I.R.S. Employer Identification No.)

9620 Medical Center Drive, Suite 300, Rockville, MD	20850
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (240) 864-2600

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, $0.01 par value	The NASDAQ Stock Market LLC
(Title of each class)	(Name of each exchange on which registered)

Securities registered pursuant to Section 12(g) of the Act: NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨  No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15 (d) of the Act. Yes ¨  No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this form 10-K or any amendment to this Form 10-K ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨	Accelerated filer ¨	Non-accelerated filer ¨	Smaller reporting company x
			Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

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

As of June 30, 2017, the aggregate market value of the shares of common stock held by non-affiliates was approximately $35,022,789.

As of March 28, 2018, 79,641,876 shares of the Company’s common stock were outstanding.

Documents Incorporated By Reference

The registrant intends to file a definitive proxy statement pursuant to Regulation 14A within 120 days of the end of the fiscal year ended December 31, 2017. The proxy statement is incorporated herein by reference into the following parts of the Form 10-K:

Part III, Item 10, Directors, Executive Officers and Corporate Governance;

Part III, Item 11, Executive Compensation;

Part III, Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters;

Part III, Item 13, Certain Relationships and Related Transactions, and Director Independence; and

Part III, Item 14, Principal Accounting Fees and Services.

CASI PHARMACEUTICALS, INC.

FORM 10-K - FISCAL YEAR ENDED DECEMBER 31, 2017

TABLE OF CONTENTS

Form 10-K Part No.	Form 10-K Item No.	Description	Page No.
I	1	Business	3
	1A	Risk Factors	14
	1B	Unresolved Staff Comments	25
	2	Properties	25
	3	Legal Proceedings	26
	4	Mine Safety Disclosure	26
II	5	Market for Registrant’s Common Equity, Related Stockholder Matters And Issuer Purchases of Equity Securities	26
	6	Selected Financial Data	26
	7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
	7A	Quantitative and Qualitative Disclosures About Market Risk	34
	8	Financial Statements and Supplementary Data	34
	9	Changes in and Disagreements with Accountants On Accounting and Financial Disclosure	34
	9A	Controls and Procedures	35
	9B	Other Information	35
III	10	Directors, Executive Officers and Corporate Governance	35
	11	Executive Compensation	36
	12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	36
	13	Certain Relationships and Related Transactions, and Director Independence	36
	14	Principal Accounting Fees and Services	36
IV	15	Exhibits and Financial Statement Schedules	36
		Signatures	41
		Audited Consolidated Financial Statements	F-1

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report contains certain forward-looking statements within the meaning of Section 27A of the Securities Exchange Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements also may be included in other statements that we make. All statements that are not descriptions of historical facts are forward-looking statements. These statements can generally be identified by the use of forward-looking terminology such as “believes,” “expects,” “intends,” “may,” “will,” “should,” or “anticipates” or similar terminology. These forward-looking statements include, among others, statements regarding the timing of our clinical trials, our cash position and future expenses, and our future revenues.

Actual results could differ materially from those currently anticipated due to a number of factors, including: the risk that we may be unable to continue as a going concern as a result of our inability to raise sufficient capital for our operational needs; the possibility that we may be delisted from trading on the Nasdaq Capital Market; the volatility in the market price of our common stock; risks relating to interests of our largest stockholders that differ from our other stockholders; the risk of substantial dilution of existing stockholders in future stock issuances; the difficulty of executing our business strategy in China; the risk that we will not be able to effectively select, register and commercialize products from our recently acquired portfolio of Abbreviated New Drug Applications (ANDAs); our inability to predict when or if our product candidates will be approved for marketing by the China Food and Drug Administration authorities; our inability to enter into strategic partnerships for the development, commercialization, manufacturing and distribution of our proposed product candidates or future candidates; risks relating to the need for additional capital and the uncertainty of securing additional funding on favorable terms; risks associated with our product candidates; risks associated with any early-stage products under development; the risk that results in preclinical and early clinical models are not necessarily indicative of later clinical results; uncertainties relating to preclinical and clinical trials, including delays to the commencement of such trials; the lack of success in the clinical development of any of our products; dependence on third parties; and risks relating to the commercialization, if any, of our proposed products (such as marketing, safety, regulatory, patent, product liability, supply, competition and other risks). Such factors, among others, could have a material adverse effect upon our business, results of operations and financial condition.

We caution investors that actual results or business conditions may differ materially from those projected or suggested in forward-looking statements as a result of various factors including, but not limited to, those described above and in Section IA, “Risk Factors” of this Annual Report on Form 10-K for the fiscal year ended December 31, 2017 (this “Annual Report”) and our other filings with the Securities and Exchange Commission (“SEC”). We cannot assure you that we have identified all the factors that create uncertainties. Moreover, new risks emerge from time to time and it is not possible for our management to predict all risks, nor can we assess the impact of all risks on our business or the extent to which any risk, or combination of risks, may cause actual results to differ from those contained in any forward-looking statements. Readers should not place undue reliance on forward-looking statements. We undertake no obligation to publicly release the result of any revision of these forward-looking statements to reflect events or circumstances after the date they are made or to reflect the occurrence of unanticipated events.

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PART I

ITEM 1. BUSINESS.

OVERVIEW

CASI Pharmaceuticals, Inc. (“CASI”, the “Company”) (Nasdaq: CASI) is a U.S. based biopharmaceutical company dedicated to bringing high quality, cost-effective pharmaceutical products and innovative oncology therapeutics to patients. We intend to execute our plan to become a leading pharmaceutical company with a substantial market share in China. We are headquartered in Rockville, Maryland with established China operations that are growing as we continue to further in-license or acquire products for our pipeline.

Our product pipeline features (1) EVOMELA^®, MARQIBO^®, and ZEVALIN^®, all U.S. Food and Drug Administration (“FDA”) approved drugs in-licensed from Spectrum Pharmaceuticals, Inc. for China regional rights, and currently in various stages in the regulatory process for market approval in China, (2) an acquired portfolio of 25 FDA-approved abbreviated new drug applications (“ANDAs”) one ANDA that FDA tentatively approved, and three ANDAs that are pending FDA approval, from which we will prioritize a select subset for product registration and commercialization in China, (3) our proprietary drug candidate, ENMD-2076, currently in Phase 2 clinical development, and (4) CASI-001 and CASI-002, proprietary early-stage candidates in immuno-oncology in preclinical development. We believe our pipeline reflects a risk-balanced approach between products in various stages of development, and between products that we develop ourselves and those that we develop with our partners for the China regional market. We intend to continue building a significant product pipeline of high quality, cost-effective pharmaceuticals, as well as innovative drug candidates that we will commercialize alone in China and with partners for the rest of the world. For in-licensed products, the Company uses a market-oriented approach to identify pharmaceutical candidates that it believes have the potential for gaining widespread market acceptance, either globally or in China, and for which development can be accelerated under the Company’s drug development strategy.

Our focus is to bring high quality, cost-effective pharmaceutical products and innovative oncology therapeutics to patients. The implementation of our plans will include leveraging our resources in both the United States and China. In order to capitalize on the drug development and capital resources available in China, the Company is doing business in China through its wholly-owned China-based subsidiary that will execute the China portion of the Company’s drug development strategy, including conducting clinical trials in China, pursuing local funding opportunities and strategic collaborations, and implementing the Company’s transition to a commercial enterprise.

IN-LICENSED PRODUCTS FOR THE CHINA REGIONAL MARKET

In September 2014, we acquired from Spectrum Pharmaceuticals, Inc. and certain of its affiliates (together referred to as “Spectrum”) exclusive rights in greater China (including Taiwan, Hong Kong and Macau) to three in-licensed oncology products, including EVOMELA^® (melphalan hydrochloride for injection) approved in the U.S. primarily for use as a high-dose conditioning treatment prior to hematopoietic progenitor (stem) cell transplantation in patients with multiple myeloma, MARQIBO^® (vinCRIStine sulfate LIPOSOME injection) approved in the U.S. for advanced adult Ph- acute lymphoblastic leukemia (ALL), and ZEVALIN^® (ibritumomab tiuxetan) approved in the U.S. for advanced non-Hodgkin’s lymphoma. A description of the products and their current status is below.

EVOMELA^®

EVOMELA^® is a new intravenous formulation of melphalan being investigated by Spectrum in the multiple myeloma transplant setting. The formulation avoids the use of propylene glycol, which is used as a co-solvent in the current formulation of melphalan and has been reported to cause renal and cardiac side-effects that limit the ability to deliver higher quantities of intended therapeutic compounds. The use of Captisol technology to reformulate melphalan is anticipated to allow for longer administration durations and slower infusion rates, potentially enabling clinicians to avoid reductions and safely achieve a higher dose intensity of pre-transplant chemotherapy. In March 2016, Spectrum received notification from the FDA of the grant of approval of its NDA for EVOMELA^® (melphalan) for injection primarily for use as a high-dose conditioning treatment prior to hematopoietic progenitor (stem) cell transplantation in patients with multiple myeloma. We have initiated the regulatory and development process towards marketing approval for EVOMELA^® in China. In December 2016, the China Food and Drug Administration (“CFDA”) accepted for review our import drug registration application for EVOMELA^® and in 2017 has granted priority review of the import drug registration clinical trial application (CTA), which has completed the quality testing phase of the regulatory process and is currently in technical review by Center for Drug Evaluation (CDE) of the CFDA as part of the regulatory process.

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MARQIBO^®

MARQIBO^® is a novel, sphingomyelin/cholesterol liposome-encapsulated, formulation of vincristine sulfate, a microtubule inhibitor. MARQIBO^® is approved by the FDA for the treatment of adult patients with Philadelphia chromosome-negative (Ph-) acute lymphoblastic leukemia (ALL) in second or greater relapse or whose disease has progressed following two or more anti-leukemia therapies. We have initiated the regulatory and development process towards marketing approval for MARQIBO in China. In January 2016, the CFDA accepted for review our import drug registration application for MARQIBO^® which currently is in the quality testing phase of the regulatory review.

ZEVALIN^®

ZEVALIN^® injection for intravenous use is a CD20-directed radiotherapeutic antibody. It is indicated for the treatment of patients with relapsed or refractory, low-grade or follicular B-cell non-Hodgkin’s lymphoma (NHL). ZEVALIN^® is also indicated for the treatment of patients with previously untreated follicular non-Hodgkin’s Lymphoma who achieve a partial or complete response to first-line chemotherapy. ZEVALIN^® therapeutic regimen consists of two components: rituximab, and Yttrium-90 (Y-90) radiolabeled ZEVALIN^® for therapy. ZEVALIN^® builds on the combined effect of a targeted biologic monoclonal antibody augmented with the therapeutic effects of a beta-emitting radioisotope. Since ZEVALIN^® is already approved in the U.S. and marketed by Spectrum, we expect that gaining approval from local regulatory authorities for commercialization in greater China will require a shorter timeframe compared to clinical-stage drugs. In 2017, the CFDA accepted for review our import drug registration for ZEVALIN^® including both the antibody kit and the radioactive Yttrium-90 component.

U.S. FDA ANDAs

On January 26, 2018 the Company acquired a portfolio of 25 U.S. FDA-approved abbreviated new drug applications (ANDAs), one ANDA that FDA tentatively approved, and three ANDAs that are pending FDA approval. CASI intends to select and commercialize certain products from the portfolio that offer unique market and cost-effective manufacturing opportunities in China and/or in the U.S.

The portfolio consists of:

Product	Approved
Benazepril tablets	X
Bisoprolol fumarate tablets	X
Burprenorphine HCL Sublingual tablets	X
Cefprozil tablets	X
Cilostazol tablets – 50mg	X
Cilostazol tablets – 100mg	X
Desvenlafaxine ER tablets	X
Diclofenac potassium 50mg tablets	X
Diclofenac sodium DR 25mg, 50mg tablets	X
Diclofenac sodium DR 75mg tablets	X

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Econazole nitrate cream	X
Entecavir tablets	X
Epinastine HCl Ophthalmic Solution	X
Heparin sodium for injection	X
Lisinopril tablets and Lisinopril BPP tablets	X
Methimazole tablets	X
Midodrine tablets	X
Nabumetone tablets	X
Naratriptan tablets	X
Ondansetron HCL tablets	X
Repaglinide tablets	X
Ribavirin capsules	X
Spironolactone tablets	X
Tizanidine tablets	X
Triamterene and hydrochlorothiazide combination tablets	X

Product	Pending
Aripiprazole tablets	X
Bepotastine Ophthalmic Solution	X
Bromfenac Ophthalmic Solution	X
Telmisartan and hydrochlorothiazide tablets	X

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ENMD-2076

ENMD-2076, internally developed, is an orally-active, Aurora A/angiogenic kinase inhibitor with a unique kinase selectivity profile and multiple mechanisms of action. We are currently conducting multiple Phase 2 studies of ENMD-2076, the status of which is outlined below:

Disease Indication	Status		Sites
Advanced Fibrolamellar Carcinoma	U.S. sites:	Phase 2 trial enrollment completed	· Memorial Sloan-Kettering Cancer Center · University of Colorado Cancer Center · University of Texas Southwestern Medical Center · University of California at San Francisco · Dana-Farber Cancer Institute
	China sites:	Received CFDA approval to expand trial to China sites	· China site(s) to be determined
Triple-Negative Breast Cancer	U.S. sites:	Phase 2 trial enrollment completed; biomarker analysis ongoing	· University of Colorado · Indiana University
	China sites:	Phase 2a trial enrollment completed	· Cancer Hospital of Chinese Academy of Medical Sciences · Additional China site(s) to be determined

ENMD-2076 has received orphan drug designation from the FDA for the treatment of ovarian cancer, multiple myeloma, acute myeloid leukemia and hepatocellular carcinoma (HCC). In October 2015, the Company also received orphan drug designation from the European Medicines Agency (EMA) for the treatment of HCC including FLC. In the United States, the Orphan Drug Act is intended to encourage companies to develop therapies for the treatment of diseases that affect fewer than 200,000 people in this country. Orphan drug designation provides us with seven years of market exclusivity that begins once ENMD-2076 receives FDA marketing approval for a specific indication. It also provides certain financial incentives that can help support the development of ENMD-2076, such as a tax credit.

PRECLINICAL DEVELOPMENT

Our primary focus is on clinical-stage and late-stage drug candidates so that we can immediately employ our U.S. and China drug development model to accelerate clinical and regulatory progress. In addition to our clinical-and late-stage approach, we have two potential drug candidates in preclinical development that we will continue to evaluate in 2018.

MANAGEMENT

The current senior management team includes: Dr. Wei-Wu He, Executive Chairman, Dr. Ken K. Ren, Chief Executive Officer; Cynthia W. Hu, Chief Operating Officer, General Counsel & Secretary; Dr. Alexander A. Zukiwski, Chief Medical Officer, Sara B. Capitelli, Vice President, Finance & Principal Accounting Officer; and Dr. James E. Goldschmidt, Senior Vice President, Business Development. The Company, as part of its normal operations, also has consulting relationships with a core team of experts in clinical trial design, FDA and CFDA strategy, scientific research, manufacturing and formulation, among others.

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Our management team promotes and instills a corporate culture of prudent resource management, fiscal responsibility and accountability, while maintaining an environment of innovation and entrepreneurialism in order to quickly respond to opportunities and to react to any changes in market conditions and in the regulatory landscape.

BUsiness Development AND COMMERCIALIZATION Strategy

We intend to continue our path to become fully integrated with drug development and commercial operations. Our current external business development effort is concentrated on acquiring additional drug candidates through in-license and acquisitions to expand our pipeline. Our pipeline will reflect a diversified and risk-balanced set of assets that include (1) late-stage clinical drug candidates in-licensed for China regional rights, such as EVOMELA^®, MARQIBO^® and ZEVALIN^®, (2) high quality generic pharmaceuticals, such as the portfolio of 29 ANDAs recently acquired, (3) proprietary innovative drug candidates, such as our ENMD-2076, and (4) new drug candidates under internal preclinical development. We use a market-oriented approach to identify pharmaceutical candidates that we believe have the potential for gaining widespread market acceptance, either globally or in China, and for which development can be accelerated under the Company’s drug development strategy. Although oncology is our principal clinical and commercial focus, we will be opportunistic about other pharmaceuticals that can address unmet medical needs.

The Company’s wholly-owned China-based subsidiary is executing the China portion of our drug development strategy, including conducting clinical trials in China, pursuing local funding opportunities and strategic collaborations, and implementing our plan for accelerated development and commercialization in the China market.

RELATIONSHIPS RELATING TO CLINICAL PROGRAMS

Contract Manufacturing. Clinical trial materials for EVOMELA^®, MARQIBO^®, and ZEVALIN^® are supplied by our partner Spectrum and its contract manufacturers. We anticipate that the manufacturing for our newly acquired ANDA portfolio will be through new contract manufacturers located in China and outside of the U.S. after technology transfer. The manufacturing efforts for the production of our clinical trial materials for ENMD-2076 are performed by contract manufacturing organizations. Established relationships, coupled with supply agreements, have secured the necessary resources to supply clinical materials for our clinical development program. We believe that our current strategy of outsourcing manufacturing is cost-effective and allows for the flexibility we require.

Sponsored Research Agreements. To support development efforts, we may enter into sponsored research agreements with outside scientists to conduct specific projects. Under these agreements, we have secured the rights to intellectual property and to develop under exclusive license any discoveries resulting from these collaborations. The funds, if any, we provide in accordance with these agreements partially support the scientists’ laboratory, research personnel and research supplies.

INTELLECTUAL PROPERTY

We generally seek patent protection for our technology and product candidates in the United States, Canada, China and other key markets.  The patent position of biopharmaceutical companies generally is highly uncertain and involves complex legal and factual questions.  Our success will depend, in part, on whether we can: (i) obtain patents to protect our own products; (ii) obtain licenses to use the technologies of third parties, which may be protected by patents; (iii) protect our trade secrets and know-how; and (iv) operate without infringing the intellectual property and proprietary rights of others.

With regard to our in-licensed drug candidates (EVOMELA^®, MARQIBO^®, and ZEVALIN^®), we have acquired exclusive licenses to intellectual property to enable us to develop and commercialize the drug candidates in our commercial markets.

With respect to ENMD-2076, we directly own 22 granted patents or allowed patent applications (including 2 granted United States patents, 1 granted Chinese patent, and 18 granted patents and 1 additional pending patent application in Brazil).  The patent term for U.S. Patent No. 7,563,787 will expire March 5, 2027, assuming all maintenance fees are paid.  If and when the FDA approves ENMD-2076, this patent term may be extended.  The patent terms of our granted patents (including any patents issuing from our pending patent applications) in other countries will expire September 29, 2026, assuming all annuities are paid and not considering any term extensions for regulatory approval that might be available. We also directly own two pending U.S. provisional applications directed to treatment methods using ENMD-2076.

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We have pending trademark applications for CASI and CASI PHARMACEUTICALS.

We review and assess our portfolio on a regular basis to secure protection and to align our patent strategy with our overall business strategy. 

GOVERNMENT REGULATION

U.S. Food and Drug Administration (FDA)

Our development, manufacture, and potential sale of therapeutics in the United States, China and other countries are subject to extensive regulations by federal, state, local and foreign governmental authorities.

In the United States, the FDA regulates product candidates being developed as drugs or biologics. New drugs are subject to regulation under the Federal Food, Drug, and Cosmetic Act (FFDCA), and biological products, in addition to being subject to certain provisions of the FFDCA, are regulated under the Public Health Service Act (PHSA). We believe that the FDA will regulate the products currently being developed by us or our collaborators as new drugs. Both the FFDCA and PHSA and corresponding regulations govern, among other things, the testing, manufacturing, safety, efficacy, labeling, storage, recordkeeping, advertising and other promotion of biologics or new drugs, as the case may be. FDA clearances must be obtained before clinical testing, and approvals must be obtained before marketing of biologics or drugs.

From time to time, legislation is drafted, introduced and passed in Congress that could significantly change the statutory provisions governing the approval, manufacturing and marketing of products regulated by the FDA. In addition to new legislation, FDA regulations and policies are often revised or reinterpreted by the agency in ways that may significantly affect our business and our product candidates or any future product candidates we may develop. It is impossible to predict whether further legislative or FDA regulation or policy changes will be enacted or implemented and what the impact of such changes, if any, may be.

Preparing drug candidates for regulatory approval has historically been a costly and time-consuming process. Generally, in order to gain FDA permission to test a new agent, a developer first must conduct preclinical studies in the laboratory and in animal model systems to gain preliminary information on an agent’s effectiveness and to identify any safety problems. The results of these studies are submitted as a part of an Investigational New Drug Application (IND) for a drug or biologic, which the FDA must review before human clinical trials of an investigational drug can begin. In addition to the known safety and effectiveness data on the drug or biologic, the IND must include a detailed description of the clinical investigations proposed. Based on the current FDA organizational structure, ENMD-2076 is regulated as a new chemical entity by the FDA’s Center for Drug Evaluation and Research. Generally, as new chemical entities like our small molecules are discovered, formal IND-directed toxicology studies are required prior to initiating human testing. Clinical testing may begin 30 days after submission of an IND to the FDA unless FDA objects to the initiation of the study or has outstanding questions to discuss with the IND sponsor.

In order to commercialize any drug or biological products, we or our collaborators must sponsor and file an IND and conduct clinical studies to demonstrate the safety and effectiveness necessary to obtain FDA approval of such products. For studies conducted under INDs sponsored by us or our collaborators, we or our collaborators will be required to select qualified investigators (usually physicians within medical institutions) to supervise the administration of the products, test or otherwise assess patient results, and collect and maintain patient data; monitor the investigations to ensure that they are conducted in accordance with applicable requirements, including the requirements set forth in the general investigational plan and protocols contained in the IND; and comply with applicable reporting and recordkeeping requirements.

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Clinical trials of drugs or biologics are normally done in three phases, although the phases may overlap. Phase 1 trials for drug candidates to be used to treat cancer patients are concerned primarily with the safety and preliminary effectiveness of the drug, involve a small group ranging from 15 - 40 subjects, and may take from six months to over one year to complete. Phase 2 trials normally involve 30 - 200 patients and are designed primarily to demonstrate effectiveness in treating or diagnosing the disease or condition for which the drug is intended, although short-term side effects and risks in study subjects whose health is impaired may also be examined. Phase 3 trials are expanded clinical trials with larger numbers of patients which are intended to evaluate the overall benefit-risk relationship of the drug and to gather additional information for proper dosage and labeling of the drug. Phase 3 clinical trials generally take two to five years to complete, but may take longer. The FDA receives reports on the progress of each phase of clinical testing, as well as reports of unexpected adverse experiences occurring during the trial. The FDA may require the modification, suspension, or termination of clinical trials, if it concludes that an unwarranted risk is presented to patients, or, in Phase 2 and 3, if it concludes that the study protocols are deficient in design to meet their stated objectives.

If clinical trials of a new drug candidate are completed successfully, the sponsor of the product may seek FDA marketing approval. If the product is classified as a new drug, an applicant must file a New Drug Application (NDA) with the FDA and receive approval before marketing the drug commercially. The NDA must include detailed information about the product and its manufacturer and the results of product development, preclinical studies and clinical trials. Generic drugs, which are therapeutic equivalents of existing brand name drugs, require the filing of an ANDA. An ANDA does not, for the most part, require clinical studies since safety and efficacy have already been demonstrated by the product originator. However, the ANDA must provide data to support the bioequivalence of the generic drug product. User fees must be paid with submission of applications for non-orphan products in order to support the cost of agency review. While such fees are not significant for ANDAs, an NDA for a non-orphan product requires a user fee of over $2.4 million.

The testing and approval processes require substantial time and effort, and there can be no assurance that any approval will be obtained on a timely basis, if at all. The time required by the FDA to review and approve NDAs and ANDAs is variable and, to a large extent, beyond our control. Notwithstanding the submission of relevant data, the FDA may ultimately decide that an NDA does not satisfy its regulatory criteria and deny the approval. Further, the FDA may require additional clinical studies before making a decision on approval. In addition, the FDA may condition marketing approval on the conduct of specific post-marketing studies to further evaluate safety and effectiveness. Even if FDA regulatory clearances are obtained, a marketed product is subject to continuing regulatory requirements and review relating to current Good Manufacturing Practices, or cGMP, adverse event reporting, promotion and advertising, and other matters. The FDA strictly regulates labeling, advertising, promotion and other types of information on products that are placed on the market. Products may be promoted only for the approved indications and in accordance with the provisions of the approved label. Discovery of previously unknown problems or failure to comply with the applicable regulatory requirements may result in restrictions on the marketing of a product or withdrawal of the product from the market, as well as possible civil or criminal sanctions.

The Generic Drug Enforcement Act of 1992 establishes penalties for wrongdoing in connection with the development or submission of an application. In general, the FDA is authorized to temporarily bar companies, or temporarily or permanently bar individuals, from submitting or assisting in the submission of applications to FDA, and to temporarily deny approval and suspend applications to market drugs under certain circumstances. In addition to debarment, the FDA has numerous discretionary disciplinary powers, including the authority to withdraw approval of an application or to approve an application under certain circumstances and to suspend the distribution of all drugs approved or developed in connection with certain wrongful conduct. The FDA may also withdraw product approval or take other corrective measures if ongoing regulatory requirements are not met or if safety or efficacy questions are raised after the product reaches the market.

Manufacturers and other entities involved in the manufacturing and distribution of approved products are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP and other laws. The cGMP requirements apply to all stages of the manufacturing process, including the production, processing, sterilization, packaging, labeling, storage and shipment of the product. Manufacturers must establish validated systems to ensure that products meet specifications and regulatory requirements, and test each product batch or lot prior to its release. We rely, and expect to continue to rely, on third parties for the production of clinical quantities of our product candidates and any future product candidates we may develop. Future FDA and state inspections may identify compliance issues at the facilities of our contract manufacturers that may disrupt production or distribution or may require substantial resources to correct.

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Healthcare Regulation

Federal and state healthcare laws, including fraud and abuse and health information privacy and security laws, also apply to our business. If we fail to comply with those laws, we could face substantial penalties and our business, results of operations, financial condition and prospects could be adversely affected. The laws that may affect our ability to operate include, but are not limited to: the federal Anti-Kickback Statute, which prohibits. among other things, soliciting, receiving, offering or paying remuneration, directly or indirectly, to induce, or in return for, the purchase or recommendation of an item or service reimbursable under a federal healthcare program, such as the Medicare and Medicaid programs; and federal civil and criminal false claims laws and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payers that are false or fraudulent. Additionally, we are subject to state law equivalents of each of the above federal laws, which may be broader in scope and apply regardless of whether the payer is a federal healthcare program, and many of which differ from each other in significant ways and may not have the same effect, further complicate compliance efforts.

Numerous federal and state laws, including state security breach notification laws, state health information privacy laws and federal and state consumer protection laws, govern the collection, use and disclosure of personal information. Other countries also have, or are developing, laws governing the collection, use and transmission of personal information. In addition, most healthcare providers who are expected to prescribe our products and from whom we obtain patient health information, are subject to privacy and security requirements under the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology and Clinical Health Act, or HIPAA. Although we are not directly subject to HIPAA, we could be subject to criminal penalties if we obtain and/or disclose individually identifiable health information from a HIPAA-covered entity, including healthcare providers, in a manner that is not authorized or permitted by HIPAA. The legislative and regulatory landscape for privacy and data protection continues to evolve, and there has been an increasing amount of focus on privacy and data protection issues with the potential to affect our business, including recently enacted laws in a majority of states requiring security breach notification. These laws could create liability for us or increase our cost of doing business.

In addition, the Patient Protection and Affordable Care Act, as amended by the Health Care Education Reconciliation Act, or the PPACA, created a federal requirement under the federal Open Payments program, that requires certain manufacturers to track and report to the Centers for Medicare and Medicaid Services, or CMS, annually certain payments and other transfers of value provided to physicians and teaching hospitals made in the previous calendar year. In addition, there are also an increasing number of state laws that require manufacturers to make reports to states on pricing and marketing information. These laws may affect our sales, marketing, and other promotional activities by imposing administrative and compliance burdens on us. In addition, given the lack of clarity with respect to these laws and their implementation, our reporting actions could be subject to the penalty provisions of the pertinent state and federal authorities.

For those marketed products which are covered in the United States by the Medicaid programs, we have various obligations, including government price reporting and rebate requirements, which generally require products be offered at substantial rebates/discounts to Medicaid and certain purchasers (including “covered entities” purchasing under the 340B Drug Discount Program). We are also required to discount such products to authorized users of the Federal Supply Schedule of the General Services Administration, under which additional laws and requirements apply. These programs require submission of pricing data and calculation of discounts and rebates pursuant to complex statutory formulas, as well as the entry into government procurement contracts governed by the Federal Acquisition Regulations, and the guidance governing such calculations is not always clear. Compliance with such requirements can require significant investment in personnel, systems and resources, but failure to properly calculate prices, or offer required discounts or rebates could subject us to substantial penalties.

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China Food and Drug Administration (CFDA)

We are also subject to regulation and oversight by different levels of the food and drug administration in China, in particular, the CFDA. For clinical-stage product candidates, our development activities in China can follow two purposes: (1) to obtain clinical data to support our global FDA-regulated trials as is the case for our proprietary ENMD-2076, and (2) to obtain clinical data to support local registration with the CFDA. For late-stage product candidates that we in-license for greater China rights, such as EVOMELA^®, MARQIBO^®, and ZEVALIN^®, our development activities in China are to secure marketing approval from CFDA by conducting import drug registration. The “Law of the PRC on the Administration of Pharmaceuticals,” as amended on February 28, 2001, provides the basic legal framework for the administration of the production and sale of pharmaceuticals in China and covers the manufacturing, distributing, packaging, pricing and advertising of pharmaceutical products in China. Its implementation regulations set out detailed implementation rules with respect to the administration of pharmaceuticals in China. We are also subject to other PRC laws and regulations that are applicable to manufacturers and distributors in general.

Product Manufacturing. For the registration of locally manufactured drugs, both drug substance and drug product need to be manufactured in China through either a self-owned facility or a contract manufacturing organization. The study drug to be used for clinical trials must be manufactured in compliance with CFDA Good Manufacturing Practice (GMP) guidelines. A domestic manufacturer of pharmaceutical products and active pharmaceutical ingredient (API) must obtain the drug manufacturing license and the GMP certification to produce pharmaceutical products and API for marketing in China. GMP certification criteria include institution and staff qualifications, production premises and facilities, equipment, raw materials, hygiene conditions, production management, quality controls, product distributions, maintenance of sales records and manner of handling customer complaints and adverse reaction reports. Both the drug manufacturing license and the GMP certificate is valid for five years, and must be renewed at least six months before its expiration date. A manufacturer is required to obtain GMP certificates to cover all of its production operations.

In addition, before commencing business, a pharmaceutical manufacturer must also obtain a business license from the relevant administration for industry and commerce.

Preclinical Research and Clinical Trials. For an investigational new drug application, a clinical trial approval issued from the CFDA is required to conduct clinical trials. Chemical generics, on the other hand, only need to undergo bioequivalent studies upon a filing for record with the CFDA. In order to apply for a clinical trial application approval to support local registration in China, a pharmaceutical company is required to conduct a series of preclinical research including research on chemistry, pharmacology, toxicology and pharmacokinetics of pharmaceuticals. This preclinical research should be conducted in compliance with the relevant regulatory guidelines issued by the CFDA. In particular, safety evaluation research must be conducted in compliance with China’s Good Laboratory Practice.

After completion of preclinical studies and obtaining the clinical trial approval from the CFDA, clinical trials are conducted in compliance with China’s Good Clinical Practice and include:

Phase 1 – preliminary trial of clinical pharmacology and human safety evaluation studies. The primary objective is to observe the pharmacokinetics and the tolerance level of the human body to the new medicine as a basis for ascertaining the appropriate methods of dosage.

Phase 2 – preliminary exploration on the therapeutic efficacy. The purpose is to assess preliminarily the efficacy and safety of pharmaceutical products on patients with the target indication of the pharmaceutical products and to provide the basis for the design and dosage tests for Phase 3. The dosing and methodology of research in this phase generally adopts double-blind, random methods with limited sample sizes.

Phase 3 – confirm the therapeutic efficacy. The objective is to further verify the efficacy and safety of pharmaceutical products on patients within the target indication, to evaluate the benefits and risks and finally to provide sufficient experimentally proven evidence to support the registration application of the pharmaceutical products. In general, the trial should adopt double-blind random methods with sufficient sample sizes.

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Import Drug Registration or Multi Regional Clinical Trials. CFDA regulations allow foreign drug developers to conduct import drug registration or multi regional clinical trials in China for a new drug as part of a global drug development program. An International Multicenter Clinical Trial (IMCCT) Application needs to be filed with the CFDA and approval is required prior to conducting the trials.

In October, 2017, the CFDA released the Decision on Adjusting Items concerning the Administration of Imported Drug Registration, which includes the following key points:

· If the International Multicenter Clinical Trial, or IMCCT, of a drug is conducted in China, the IMCCT drug does not need to be approved or entered into either a Phase II or III clinical trial in a foreign country, except for preventive biological products. Phase I IMCCT is permissible in China.

· If the IMCCT is conducted in China, the application for drug marketing authorization can be submitted directly after the completion of the IMCCT.

· With respect to clinical trial and market authorization applications for imported innovative chemical drugs and therapeutic biological products, the marketing authorization in the country or region where the foreign drug manufacturer is located will not be required.

· With respect to drug applications that have been accepted before the release of this Decision, if relevant requirements are met, importation permission can be granted if such applications request exemption of clinical trials for the imported drugs based on the data generated from IMCCT.

The CFDA Decision on IMCCT and the application for imported new drugs is expected to streamline and accelerate the applications for imported new drugs.

In order to apply for an IMCCT Application in China, a biopharmaceutical company is required to submit a comprehensive investigation new drug application package filed with foreign regulatory agency, i.e. the FDA, in a format compliant with CFDA guidance.

After obtaining the IMCCT approval from the CFDA, clinical trials are conducted in compliance with the both FDA/ICH and CFDA Good Clinical Practice guidelines.

New Drug Registration and Application. After completion of the 3 phases of clinical trials demonstrating the safety and effectiveness of a pharmaceutical in its targeted indication, a New Drug Registration Application needs to be filled with the CFDA, which includes research data of chemistry, manufacturing and controls, pre-clinical studies and clinical trial report. For imported drugs, the New Drug Registration Application is also known as the Import Drug License Application.

Once a new drug registration approval or import drug license is received, the product can be sold nationwide in China.

Generic Quality Consistency Evaluation. The CFDA launched the generic quality consistency evaluation (GQCE) in August 2015, which requires generic drugs to conform to the quality standards of originator products. Except for immediate release oral solid dosage forms, manufacturers of generics need to conduct bioequivalent studies in order to establish equivalence to the originator products.

The first wave of GQCE focuses on 289 oral formulations of chemical drugs listed in China’s Essential Drug List. The CFDA will revoke marketing authorizations of these generic drugs if their manufacturers fail to complete the GQCE by the end of 2018 (or the end of 2021 if bioequivalent studies are required). In addition, once one generic manufacturer successfully passes the GQCE, all of the other manufacturers producing the same generic drug must complete their GQCE within three years following the first successful GQCE. Otherwise, the CFDA will not renew their respective marketing authorizations.

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The launch of GQCE will significantly enhance of the bar of entry of generic manufacturers. Generics that pass the GQCE will be on a preferred list at public hospital tenders and will be entitled to a more favorable reimbursement status. Public hospitals will only be allowed to purchase from the first three generic manufacturers who pass the GQCE.

COMPETITION

Competition in the pharmaceutical, biotechnology and biopharmaceutical industries is intense and based significantly on scientific and technological factors, the availability of patent and other protection for technology and products, the ability and length of time required to obtain governmental approval for testing, manufacturing and marketing and the ability to commercialize products in a timely fashion. Moreover, the biopharmaceutical industry is characterized by rapidly evolving technology that could result in the technological obsolescence of any products that we develop.

We compete with many specialized biopharmaceutical firms, as well as a growing number of large pharmaceutical companies that are applying biotechnology to their operations. It is probable that the number of companies seeking to develop products and therapies for the treatment of unmet needs in oncology will increase. Many biopharmaceutical companies have focused their development efforts in the human therapeutics area, including oncology and inflammation, and many major pharmaceutical companies have developed or acquired internal biotechnology capabilities or made commercial arrangements with other biopharmaceutical companies. These companies, as well as academic institutions, governmental agencies and private research organizations, also compete with us in recruiting and retaining highly qualified scientific personnel and consultants.

The biopharmaceutical industry has undergone, and is expected to continue to undergo, rapid and significant technological change. Consolidation and competition are expected to intensify as technical advances in each field are achieved and become more widely known. In order to compete effectively, we will be required to continually expand our scientific expertise and technology, identify and retain capable personnel and pursue scientifically feasible and commercially viable opportunities.

Our competition will be determined in part by the potential indications for which our product candidates may be developed and ultimately approved by regulatory authorities. The relative speed with which we develop new products, complete clinical trials, obtain regulatory approvals, and complete the other requirements to get a pharmaceutical product on the market are critical factors in gaining a competitive advantage. We may rely on third parties to commercialize our products, and accordingly, the success of these products will depend in significant part on these third parties’ efforts and ability to compete in these markets. The success of any collaboration will depend in part upon our collaborative partners’ own competitive, marketing and strategic considerations, including the relative advantages of alternative products being developed and marketed by our collaborative partners and our competitors.

Many of our existing or potential competitors have substantially greater financial, technical and human resources than we do and may be better equipped to develop, manufacture and market products. In addition, many of these competitors have extensive experience in preclinical testing and human clinical trials and in obtaining regulatory approvals. The existence of competitive products, including products or treatments of which we are not aware, or products or treatments that may be developed in the future, may adversely affect the marketability of products that we may develop. Our competitors’ drugs may be more effective than any drug we may commercialize and may render our product candidates obsolete or non-competitive before we can recover the expenses of developing our product candidates.

EMPLOYEES

Our work force, based in Rockville, Maryland and Beijing, China, currently consists of 49 full-time employees and 2 part-time employees. Certain of our activities, such as manufacturing and clinical trial operations, are outsourced at the present time. We may hire additional personnel, in addition to utilizing part-time or temporary consultants, on an as-needed basis. None of our employees are represented by a labor union, and we believe our relations with our employees are satisfactory.

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CORPORATE HEADQUARTERS

We were incorporated under Delaware law in 1991. The Company was restructured in 2012 and implemented a name change in 2014 to “CASI Pharmaceuticals, Inc.” Our principal executive offices are located at 9620 Medical Center Drive, Suite 300, Rockville, Maryland 20850, and our telephone number is (240) 864-2600. We also lease office space in Beijing, China, where our China operations are based, and also lease laboratory space in Beijing, China which serves as our R&D Center.

CHINA OPERATIONS

In August 2012, we established a wholly-owned China-based subsidiary and an office in Beijing, and in 2014, established a R&D Center in Beijing. The Company also established a wholly-owned domestic China based subsidiary under which our preclinical activities are operated. Our staff in Beijing currently consists of 43 full-time employees and 1 part-time employee. Among its activities, our Beijing operations help to oversee the Company’s local preclinical and clinical operation activities, as well as its CFDA regulatory activities. In addition, the Beijing operations provide support to our business development activities.

AVAILABLE INFORMATION

Through our website at www.casipharmaceuticals.com, we make available, free of charge, our filings with the SEC, including our annual proxy statements, annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and all amendments thereto, as soon as reasonably practicable after such reports are filed with or furnished to the SEC. Additionally, our board committee charters and code of ethics are available on our website. We intend to post to this website all amendments to the charters and code of ethics. Our filings are also available through the SEC via their website, http://www.sec.gov. You may also read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The information contained on our website is not incorporated by reference in this Annual Report on Form 10-K (this “Annual Report”) and should not be considered a part of this report.

ITEM 1A. RISK FACTORS.

Risks Relating to our Financial Position and Need for Additional Capital

We Have a History of Losses and Anticipate Future Losses and May Never Become Profitable on a Sustained Basis

To date, we have been engaged primarily in research and development activities. Although in the past we have received limited revenues on royalties from the sales of pharmaceuticals, license fees and research and development funding from a former collaborator and limited revenues from certain research grants, we have not derived significant revenues from operations.

We have experienced losses in each year since inception. Through December 31, 2017, we had an accumulated deficit of approximately $452.7 million. We will seek to raise capital to continue our operations and although we have been successfully funded to date through the sales of our equity securities and through limited royalty payments, there is no assurance that our capital-raising efforts will be able to attract the funding needed to sustain our operations. If we are unable to obtain additional funding for operations, we may not be able to continue operations as proposed, requiring us to modify our business plan, curtail various aspects of our operations or cease operations. In any such event, investors may lose a portion or all of their investment.

We expect that our ongoing clinical and corporate activities will result in operating losses for the foreseeable future before we commercialize any products, if ever. In addition, to the extent we rely on others to develop and commercialize our products, our ability to achieve profitability will depend upon the success of these other parties. To support our research and development of certain product candidates, we may seek and rely on cooperative agreements from governmental and other organizations as a source of support. If a cooperative agreement were to be reduced to any substantial extent, it may impair our ability to continue our research and development efforts. Even if we do achieve profitability, we may be unable to sustain or increase it.

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Our Common Stock Could Be Delisted From The NASDAQ Capital Market, Which Could Affect Our Common Stock’s Market Price and Liquidity.

Our listing on the NASDAQ Capital Market is contingent upon meeting all the continued listing requirements of the NASDAQ Capital Market. In the past, we have received written notices from NASDAQ for failing to maintain a minimum bid price of not less than $1.00 per share and a minimum of $2.5 million in stockholders’ equity. Although we have regained compliance with NASDAQ’S continued listing standards, there can be no assurance that we will remain in compliance in the future.

If our common stock is delisted from the NASDAQ Capital Market, our ability to raise capital in the future may be limited. Delisting could also result in less liquidity for our stockholders and a lower stock price.

We May Engage in Strategic and Other Corporate Transactions, Which Could Negatively Affect Our Financial Condition and Prospects

We may consider strategic and other corporate transactions as opportunities present themselves. There are risks associated with such activities. These risks include, among others, incorrectly assessing the quality of a prospective strategic partner, encountering greater than anticipated costs in integration, being unable to profitably deploy assets acquired in the transaction, such as drug candidates, possible dilution to our stockholders, and the loss of key employees due to changes in management. Further, strategic transactions may place additional constraints on our resources by diverting the attention of our management from our business operations. To the extent we issue securities in connection with additional transactions, these transactions and related issuances may have a dilutive effect on earnings per share and our ownership. Our financial condition and prospects after an acquisition depend in part on our ability to successfully integrate the operations of the acquired business or technologies. We may be unable to integrate operations successfully or to achieve expected cost savings. Any cost savings which are realized may be offset by losses in revenues or other charges to earnings.

The Current Capital and Credit Market Conditions May Adversely Affect the Company’s Access to Capital, Cost of Capital, and Ability to Execute its Business Plan as Scheduled

Access to capital markets is critical to our ability to operate. Traditionally, biopharmaceutical companies (such as we) have funded their research and development expenditures through raising capital in the equity markets. Declines and uncertainties in these markets over the past few years have severely restricted raising new capital in amounts sufficient to conduct our current operations and have affected our ability to continue to expand or fund research and development efforts with our product candidates. We require significant capital for research and development for our product candidates and clinical trials. In recent years, the general economic and capital market conditions in the United States have deteriorated significantly and have adversely affected our access to capital and increased the cost of capital, and there is no certainty that a recovery in the capital and credit markets, enabling us to raise capital in an amount to sufficiently fund our short-term and long-term plans, will occur in 2018. If these economic conditions continue or become worse, our future cost of equity or debt capital and access to the capital markets could be adversely affected. In addition, our inability to access the capital markets on favorable terms because of our low stock price, or upon our delisting from the NASDAQ Capital Market if we fail to satisfy a listing requirement, could affect our ability to execute our business plan as scheduled. Moreover, we rely and intend to rely on third parties, including our clinical research organizations, third party manufacturers, and certain other important vendors and consultants. As a result of the current volatile and unpredictable global economic situation, there may be a disruption or delay in the performance of our third-party contractors and suppliers. If such third parties are unable to adequately satisfy their contractual commitments to us in a timely manner, our business could be adversely affected.

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We Do Not Have Any Active Revenue Streams and We Are Uncertain Whether Additional Funding Will Be Available For Our Future Capital Needs and Commitments. If We Cannot Raise Additional Funding, or Access the Capital Markets, We May Be Unable to Complete Development of Our Product Candidates

We will require substantial funds in addition to our existing working capital to develop our product candidates and otherwise to meet our business objectives. We have never generated sufficient revenue during any period since our inception to cover our expenses and have spent, and expect to continue to spend, substantial funds to continue our clinical development programs. Any one of the following factors, among others, could cause us to require additional funds or otherwise cause our cash requirements in the future to increase materially:

· progress of our clinical trials or correlative studies;

· results of clinical trials;

· changes in or terminations of our relationships with strategic partners;

· changes in the focus, direction, or costs of our research and development programs;

· competitive and technological advances;

· establishment of marketing and sales capabilities;

· manufacturing;

· the regulatory approval process; or

· product launch.

At December 31, 2017, we had cash and cash equivalents of approximately $43.5 million.  We may continue to seek additional capital through public or private financing or collaborative agreements in 2018 and beyond. Our operations require significant amounts of cash. We may be required to seek additional capital for the future growth and development of our business. We can give no assurance as to the availability of such additional capital or, if available, whether it would be on terms acceptable to us. In addition, we may continue to seek capital through the public or private sale of securities, if market conditions are favorable for doing so. If we are successful in raising additional funds through the issuance of equity securities, stockholders will likely experience substantial dilution. If we are not successful in obtaining sufficient capital because we are unable to access the capital markets on favorable terms, it could reduce our research and development efforts and materially adversely affect our future growth, results of operations and financial results.

Governmental control of currency conversion and payments of RMB out of mainland China may limit our ability to utilize our cash balances effectively and affect the value of your investment.

Our China subsidiary has assets that include approximately 79.4 million China Renminbi (“RMB”), valued at approximately $12.2 million in U.S. dollars.   On a consolidated basis this balance accounts for approximately 28% of our total cash and cash equivalents.  The Chinese government imposes controls on the convertibility of RMB into foreign currencies and, in certain cases, the remittance of RMB out of mainland China.  Control on payments out of mainland China may restrict the ability of our China subsidiary to remit RMB to us.  Approval from China’s State Administration of Foreign Exchange (“SAFE”) and the People’s Bank of China (“PBOC”) may be required where RMB are to be converted into foreign currencies, including U.S. dollars, and approval from SAFE and the PBOC or their branches may be required where RMB are to be remitted out of mainland China. Specifically, under the existing restrictions, without a prior approval from SAFE and the PBOC, the cash balance of our China subsidiary is not available to us for activities outside of China including support of our in-licensing efforts.  Furthermore, because repatriation of funds requires the prior approval of SAFE and PBOC, such repatriation could be delayed, restricted or limited.

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Risks Relating to Our Business

We Plan To Conduct Development And Operations In China, Which Exposes Us To Risks Inherent In Doing Business In China

We expect to continue to conduct clinical development related activities in China in 2018. To be successful in China we will need to: establish clinical trials; attract and retain qualified personnel to operate our China-based subsidiary; and attract and retain research and development employees. We cannot assure you that we will be able to do any of these. Employee turnover in China is high due to the intensely competitive and fluid market for skilled labor. Operations in China are subject to greater political, legal and economic risks than our operations in other countries. In particular, the political, legal and economic climate in China, both nationally and regionally, is fluid and unpredictable. Our ability to operate in China may be adversely affected by changes in Chinese laws and regulations such as those related to, among other things, taxation, import and export tariffs, environmental regulations, land use rights, intellectual property, employee benefits and other matters. In addition, we may not obtain or retain the requisite legal permits to operate in China, and costs or operational limitations may be imposed in connection with obtaining and complying with such permits. Any one of the factors cited above, or a combination of them, could result in unanticipated costs, which could materially and adversely affect our business and planned operations and development in China.

We May Not Be Able To Successfully Identify And Acquire New Product Candidates

Our growth strategy relies on our in-license of new product candidates from third parties. Our pipeline will be dependent upon the availability of suitable acquisition candidates at favorable prices and upon advantageous terms and conditions. Even if such opportunities are present, we may not be able to successfully identify appropriate acquisition candidates. Moreover, other companies, many of which may have substantially greater financial resources are competing with us for the right to acquire such product candidates.

If a product candidate is identified, the third parties with whom we seek to cooperate may not select us as a potential partner or we may not be able to enter into arrangements on commercially reasonable terms or at all. Furthermore, the negotiation and completion of collaborative and license arrangements could cause significant diversion of management’s time and resources and potential disruption of our ongoing business.

Development of Our Products is Uncertain

Our product candidates are in the early stage of clinical development and require significant, time-consuming and costly research and development, testing and regulatory clearances. In developing our products, we are subject to risks of failure that are inherent in the development of these product candidates. For example, it is possible that any or all of our proposed products will be ineffective or toxic, or otherwise will fail to receive necessary FDA and CFDA clearances. There is a risk that the proposed products will be uneconomical to manufacture or market or will not achieve market acceptance. There is also a risk that third parties may hold proprietary rights that preclude us from marketing our proposed products or that others will market a superior or equivalent product. Further, our research and development activities might never result in commercially viable products.

A number of companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in advanced clinical trials even after promising results in earlier trials. Any significant clinical setback or an unfavorable outcome in our clinical trials may require us to delay, reduce the scope of, or eliminate programs and could have a material adverse effect on our company and the value of our common stock.

Once a clinical trial has begun, it may be delayed, suspended or terminated due to a number of factors, including:

· ongoing discussions with regulatory authorities regarding the scope or design of our clinical trials or requests by them for supplemental information with respect to our clinical trial results;

· failure to conduct clinical trials in accordance with regulatory requirements;

· lower than anticipated retention rate of patients in clinical trials;

· serious adverse events or side effects experienced by participants; and

· insufficient supply or deficient quality of product candidates or other materials necessary for the conduct of our clinical trials.

Many of these factors may also ultimately lead to denial of regulatory approval of a product candidate. If we experience delays, suspensions or terminations in a clinical trial, the commercial prospects for the related product candidate will be harmed, and our ability to generate product revenues will be delayed.

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Although product candidates may demonstrate promising results in early clinical (human) trials and preclinical (animal) studies, they may not prove to be effective in subsequent clinical trials. For example, testing on animals may occur under different conditions than testing in humans and therefore the results of animal studies may not accurately predict human experience. Likewise, early clinical studies may not be predictive of eventual safety or effectiveness results in larger-scale pivotal clinical trials. 

There are many regulatory steps that must be taken before any of these product candidates will be eligible for regulatory approval and subsequent sale, including the completion of preclinical and clinical trials. We do not expect that our product candidates will be commercially available for several years, if ever.

We May Not Be Able to Commercialize Our Drugs or Drug Candidates in China

We have exclusive licenses to develop and commercialize EVOMELA^® (melphalan hydrochloride) for injection MARQIBO^® (vinCRIStine sulfate LIPOSOME injection) and ZEVALIN^® (ibritumomab tiuxetan) in Greater China. In addition, on January 26, 2018 we acquired a portfolio of 25 U.S. FDA-approved ANDAs, one ANDA that FDA tentatively approved, and three ANDAs that are pending FDA approval. An ANDA contains data that is submitted to FDA for the review and potential approval of a generic drug product. Once approved, the applicant may manufacture and market the generic drug product to provide a safe, effective, lower cost alternative to the brand-name drug it references. We intend to select and commercialize certain products from our ANDA portfolio that offer unique market and cost-effective manufacturing opportunities in China and/or in the U.S.

Our success in commercializing these drugs may be inhibited by a number of factors, including:

· our inability to obtain regulatory approvals;

· our inability to recruit, train and retain adequate numbers of effective sales and marketing personnel;

· the inability of sales personnel to obtain access to or educate physicians on the benefits of our products;

· our lack of experience in manufacturing drugs for commercial sales;

· the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and

· unforeseen costs and expenses associated with creating an independent sales and marketing organization.

If we decide to rely on third parties to manufacture, sell, market and distribute our products and product candidates, we may not be successful in entering into arrangements with such third parties or may be unable to do so on terms that are favorable to us. In addition, our product revenues and our profitability, if any, may be lower if we rely on third parties for these functions than if we were to market, sell and distribute any products that we develop ourselves. We likely will have little control over such third parties, and any of them may fail to devote the necessary resources and attention to sell and market our products effectively. If we do not establish sales, marketing and distribution capabilities successfully, either on our own or in collaboration with third parties, we will not be successful in commercializing our product candidates, which would adversely affect our business and financial condition.

Developments By Competitors May Render Our Products Obsolete

If competitors were to develop superior drug candidates, our products could be rendered noncompetitive or obsolete, resulting in a material adverse effect to our business. Developments in the biotechnology and pharmaceutical industries are expected to continue at a rapid pace. Success depends upon achieving and maintaining a competitive position in the development of products and technologies. Competition from other biotechnology and pharmaceutical companies can be intense. Many competitors have substantially greater research and development capabilities, marketing, financial and managerial resources and experience in the industry. Even if a competitor creates a product that is not superior, we may not be able to compete.

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In the generic products market, we face competition from other generic pharmaceutical companies, which may impact our selling price and revenues from such products. The FDA approval process often results in the FDA granting final approval to a number of ANDAs for a given product at the time a patent for a corresponding brand product or other market exclusivity expires. This may force us to face immediate competition when we seek to introduce a generic product into the market. If competition from other generic pharmaceutical companies intensifies, revenues may decline.

We Must Show the Safety and Efficacy of Our Product Candidates Through Clinical Trials, the Results of Which are Uncertain

Before obtaining regulatory approvals for the commercial sale of our products, we must demonstrate, through preclinical studies (animal testing) and clinical trials (human testing), that our proposed products are safe and effective for use in each target indication. Testing of our product candidates will be required, and failure can occur at any stage of testing. Clinical trials may not demonstrate sufficient safety and efficacy to obtain the required regulatory approvals or result in marketable products. The failure to adequately demonstrate the safety and efficacy of a product under development could delay or prevent regulatory approval of the potential product.

Clinical trials for the product candidates we are developing may be delayed by many factors, including that potential patients for testing are limited in number. The failure of any clinical trials to meet applicable regulatory standards could cause such trials to be delayed or terminated, which could further delay the commercialization of any of our product candidates. Newly emerging safety risks observed in animal or human studies also can result in delays of ongoing or proposed clinical trials. Any such delays will increase our product development costs. If such delays are significant, they could negatively affect our financial results and the commercial prospects for our products.

Compliance with Ongoing Post-marketing Obligations for Our Approved ANDAs and NDAs May Uncover New Safety Information that Could Give Rise to a Product Recall, Updated Warnings, or Other Regulatory Actions that Could Have an Adverse Impact on Our Business.

After the FDA approves a drug for marketing under an NDA or ANDA, the product’s sponsor must comply with several post-marketing obligations that continue until the product is discontinued. These post-marking obligations include the prompt reporting of serious adverse events to the agency, the submission of product-specific annual reports that include changes in the distribution, manufacturing, and labeling information, and notification when a drug product is found to have significant deviations from its approved manufacturing specifications (among others). Our ongoing compliance with these types of mandatory reporting requirements could result in additional requests for information from the FDA and, depending on the scope of a potential product issue that the FDA may decide to pursue, potentially also result in a request from the agency to conduct a product recall or to strengthen warnings and/or revise other label information about the product. Any of these post-marketing regulatory actions could materially affect our sales and, therefore, they have the potential to adversely affect our business, financial condition, results of operations and cash flows.

The Success of Our Business Depends Upon the Members of Our Senior Management Team, Our Clinical Development Expertise in Both U.S. and China, and Our Ability to Continue to Attract and Retain Qualified Clinical, Technical and Business Personnel

We are dependent on the principal members of our senior management team and clinical development team for our business success. The loss of any of these people could impede the achievement of our development and business objectives. We do not carry key man life insurance on the lives of any of our key personnel. There is intense competition for human resources, including management, in the scientific fields in which we operate and there can be no assurance that we will be able to attract and retain qualified personnel necessary for the successful commercialization of our newly-acquired ANDA portfolio, development of our product candidates, and any expansion into areas and activities requiring additional expertise. In addition, there can be no assurance that such personnel or resources will be available when needed. In addition, we rely on a significant number of consultants to assist us in formulating our clinical strategy and other business activities. All of our consultants may have commitments to, or advisory or consulting agreements with, other entities that may limit their availability to us.

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We May Need New Collaborative Partners to Further Develop and Commercialize Products, and if We Enter Into Such Arrangements, We May Give Up Control Over the Development and Approval Process and Decrease our Potential Revenue

We plan to develop and commercialize our product candidates both with and without corporate alliances and partners. Nonetheless, we intend to explore opportunities for new corporate alliances and partners to help us develop, commercialize and market our product candidates. We expect to grant to our partners certain rights to commercialize any products developed under these agreements, and we may rely on our partners to conduct research and development efforts and clinical trials on, obtain regulatory approvals for, and manufacture and market any products licensed to them. Each individual partner will seek to control the amount and timing of resources devoted to these activities generally. We anticipate obtaining revenues from our strategic partners under such relationships in the form of research and development payments and payments upon achievement of certain milestones. Since we generally expect to obtain a royalty for sales or a percentage of profits of products licensed to third parties, our revenues may be less than if we retained all commercialization rights and marketed products directly. In addition, there is a risk that our corporate partners will pursue alternative technologies or develop competitive products as a means for developing treatments for the diseases targeted by our programs.

We may not be successful in establishing any collaborative arrangements. Even if we do establish such collaborations, we may not successfully commercialize any products under or derive any revenues from these arrangements. There is a risk that we will be unable to manage simultaneous collaborations, if any, successfully. With respect to existing and potential future strategic alliances and collaborative arrangements, we will depend on the expertise and dedication of sufficient resources by these outside parties to develop, manufacture, or market products. If a strategic alliance or collaborative partner fails to develop or commercialize a product to which it has rights, we may not recognize any revenues on that particular product.

We Depend on Patents and Other Proprietary Rights, Some of Which are Uncertain

Our success will depend in part on our ability to obtain and maintain patents for our products in the United States, China and elsewhere. The patent position of biotechnology and pharmaceutical companies in general is highly uncertain and involves complex legal and factual questions. Risks that relate to patenting our products include the following:

· our failure to obtain additional patents;

· challenge, invalidation, or circumvention of patents already issued to us;

· failure of the rights granted under our patents to provide sufficient protection;

· independent development of similar products by third parties; or

· ability of third parties to design around patents issued to our collaborators or us.

Our potential products may conflict with composition, method, and use of patents that have been or may be granted to competitors, universities or others. As the biotechnology industry expands and more patents are issued, the risk increases that our potential products may give rise to claims that may infringe the patents of others. Such other persons could bring legal actions against us claiming damages and seeking to enjoin clinical testing, manufacturing and marketing of the affected products. Any such litigation could result in substantial cost to us and diversion of effort by our management and technical personnel. If any of these actions are successful, in addition to any potential liability for damages, we could be required to obtain a license in order to continue to manufacture or market the affected products. We may not prevail in any action and any license required under any needed patent might not be made available on acceptable terms, if at all.

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We also rely on trade secret protection for our confidential and proprietary information. However, trade secrets are difficult to protect and others may independently develop substantially equivalent proprietary information and techniques and gain access to our trade secrets and disclose our technology. We may be unable to meaningfully protect our rights to unpatented trade secrets. We require our employees to complete confidentiality training that specifically addresses trade secrets. All employees, consultants, and advisors are required to execute a confidentiality agreement when beginning an employment or a consulting relationship with us. The agreements generally provide that all trade secrets and inventions conceived by the individual and all confidential information developed or made known to the individual during the term of the relationship automatically become our exclusive property. Employees and consultants must keep such information confidential and may not disclose such information to third parties except in specified circumstances. However, these agreements may not provide meaningful protection for our proprietary information in the event of unauthorized use or disclosure of such information.

To the extent that consultants, key employees, or other third parties apply technological information independently developed by them or by others to our proposed projects, disputes may arise as to the proprietary rights to such information. Any such disputes may not be resolved in our favor. Certain of our consultants are employed by or have consulting agreements with other companies and any inventions discovered by them generally will not become our property.

Our Potential Products Are Subject to Government Regulatory Requirements and an Extensive Approval Process

Our research, development, preclinical and clinical trials, manufacturing, and marketing of our product candidates are subject to an extensive regulatory approval process by the FDA, the CFDA in China and other regulatory agencies. The process of obtaining FDA, CFDA and other required regulatory approvals for drug and biologic products, including required preclinical and clinical testing, is time consuming and expensive. Even after spending time and money, we may not receive regulatory approvals for clinical testing or for the manufacturing or marketing of any products. Our collaborators or we may encounter significant delays or costs in the effort to secure necessary approvals or licenses. Even if we obtain regulatory clearance for a product, that product will be subject to continuing review.  Later discovery of previously unknown defects or failure to comply with the applicable regulatory requirements may result in restrictions on a product’s marketing or withdrawal of the product from the market, as well as possible civil or criminal penalties.

Potential Products May Subject Us to Product Liability for Which Insurance May Not Be Available

The use of our potential products in clinical trials and the marketing of any pharmaceutical products may expose us to product liability claims. We have obtained a level of liability insurance coverage that we believe is adequate in scope and coverage for our current stage of development. However, our present insurance coverage may not be adequate to protect us from liabilities we might incur. In addition, our existing coverage will not be adequate as we further develop products and, in the future, adequate insurance coverage and indemnification by collaborative partners may not be available in sufficient amounts or at a reasonable cost. If a product liability claim or series of claims are brought against us for uninsured liabilities, or in excess of our insurance coverage, the payment of such liabilities could have a negative effect on our business and financial condition.

We are subject to certain U.S. healthcare laws, regulation and enforcement; our failure to comply with those laws could have a material adverse effect on our results of operations and financial condition.

We are subject to certain U.S. healthcare laws and regulations and enforcement by the federal government and the states in which we conduct our business. The laws that may affect our ability to operate include, without limitation:

• the federal Anti-Kickback Statute (AKS), which governs our business activities, including our marketing practices, educational programs, pricing policies, and relationships with healthcare providers or other entities. The AKS prohibits, among other things, persons and entities from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual for, or the purchase, order or recommendation of, any good or service for which payment may be made under federal healthcare programs such as the Medicare and Medicaid programs. Remuneration is not defined in the AKS and has been broadly interpreted to include anything of value, including for example, gifts, discounts, coupons, the furnishing of supplies or equipment, credit arrangements, payments of cash, waivers of payments, ownership interests and providing anything at less than its fair market value. This statute has been broadly interpreted to apply to manufacturer arrangements with prescribers, purchasers and formulary managers, among others;

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• the federal Food, Drug, and Cosmetic Act, or FDCA, and its regulations which prohibit, among other things, the introduction or delivery for introduction into interstate commerce of any food, drug, device, or cosmetic that is adulterated or misbranded;

• federal civil and criminal false claims laws and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payers that are false or fraudulent, or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government;

• federal criminal laws that prohibit executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;

• the Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and their implementing regulations, which impose certain requirements relating to the privacy, security and transmission of individually identifiable health information;

• state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws, which may apply to items or services reimbursed by any third-party payer, including commercial insurers, and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts;

• the Foreign Corrupt Practices Act, a U.S. law which regulates certain financial relationships with foreign government officials (which could include, for example, certain medical professionals);

• federal and state consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers;

• federal and state government price reporting laws that require us to calculate and report complex pricing metrics to government programs, where such reported prices may be used in the calculation of reimbursement and/or discounts on our marketed drugs (participation in these programs and compliance with the applicable requirements may subject us to potentially significant discounts on our products, increased infrastructure costs, and could potentially affect our ability to offer certain marketplace discounts); and

• federal and state financial transparency laws, which generally require certain types of expenditures in the United States to be tracked and reported (compliance with such requirements may require investment in infrastructure to ensure that tracking is performed properly, and some of these laws result in the public disclosure of various types of payments and relationships with healthcare providers and healthcare entities, which could potentially have a negative effect on our business and/or increase enforcement scrutiny of our activities).

In addition, certain marketing practices, including off-label promotion, may also violate certain federal and state healthcare fraud and abuse laws, FDA rule and regulations, as well as false claims laws. If our operations are found to be in violation of any of the laws described above or any other governmental regulations that apply to us, we, or our officers or employees, may be subject to penalties, including administrative civil and criminal penalties, damages, fines, withdrawal of regulatory approval, the curtailment or restructuring of our operations, the exclusion from participation in federal and state healthcare programs and imprisonment, any of which could adversely affect our ability to sell our products or operate our business and also adversely affect our financial results.

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If we are unable to obtain both adequate coverage and adequate reimbursement from third-party payers for our products, our revenues and prospects for profitability will suffer.

Our ability to successfully commercialize our products is highly dependent on the extent to which coverage and reimbursement is, and will be, available from third-party payers, including governmental payers, such as Medicare and Medicaid, and private health insurers. Patients may not be capable of paying for our products themselves and may rely on third-party payers to pay for, or subsidize, the costs of their medications, among other medical costs. If third-party payers do not provide coverage or reimbursement for our products, our revenues and prospects for profitability will suffer. In addition, even if third-party payers provide some coverage or reimbursement for our products, the availability of such coverage or reimbursement for prescription drugs under private health insurance and managed care plans often varies based on the type of contract or plan purchased.

Current healthcare laws and regulations and future legislative or regulatory reforms to the healthcare system may affect our ability to sell our products profitably.

The United States and some foreign jurisdictions are considering or have enacted a number of legislative and regulatory proposals to change the healthcare system in ways that could affect our ability to sell our products profitably. Among policy makers and payers in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access. In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives.

We expect that healthcare reform measures, including the potential repeal and replacement of PPACA, that may be adopted in the future, may have a significant impact on our business. Most recently, the Tax Cuts and Jobs Acts was enacted, which, among other things, removed penalties for not complying with the individual mandate to carry health insurance. Additionally, all or a portion of PPACA and related subsequent legislation may be modified, repealed or otherwise invalidated through judicial challenge, which could result in lower numbers of insured individuals, reduced coverage for insured individuals and adversely affect our business. If PPACA is repealed and replaced then it is unclear how the replacement statute may impact our business. If PPACA is not repealed or replaced then it will continue to impose requirements on our business.

Moreover, certain politicians, including the President, have announced intentions to propose initiatives to regulate the prices of pharmaceutical products. We cannot know what form any such legislation may take or the market’s perception of how such legislation would affect us. Any reduction in reimbursement from government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our current products and/or those for which we may receive regulatory approval in the future.

Risks Relating to Our Reliance on Third Parties

The Independent Clinical Investigators and Contract Research Organizations That We Rely Upon to Assist in the Conduct of Our Clinical Trials May Not Be Diligent, Careful or Timely, and May Make Mistakes, in the Conduct of Our Trials

We depend on independent clinical investigators and contract research organizations, or CROs, to assist in the conduct of our clinical trials under their agreements with us. The investigators are not our employees, and we cannot control the amount or timing of resources that they devote to our programs. If independent investigators fail to devote sufficient time and resources to our drug development programs, or if their performance is substandard, it could delay the approval of our FDA applications and our introduction of new drugs. The CROs we contract with to assist with the execution of our clinical trials play a significant role in the conduct of the trials and the subsequent collection and analysis of data. Failure of the CROs to meet their obligations could adversely affect clinical development of our products.

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We Have No Current Manufacturing or Marketing Capacity and Rely on Only One Supplier For Some of Our Products

We do not expect to manufacture or market products in the near term, but we may try to do so in certain cases. We do not currently have the capacity to manufacture or market products and we have limited experience in these activities. The manufacturing processes for all of the small molecules we are developing have not yet been tested at commercial levels, and it may not be possible to manufacture these materials in a cost-effective manner. If we elect to perform these functions, we will be required to either develop these capacities, or contract with others to perform some or all of these tasks. We may be dependent to a significant extent on corporate partners, licensees, or other entities for manufacturing and marketing of products. If we engage directly in manufacturing or marketing, we will require substantial additional funds and personnel and will be required to comply with extensive regulations. We may be unable to develop or contract for these capacities when required to do so in connection with our business.

We depend on our third-party manufacturers to perform their obligations effectively and on a timely basis. These third parties may not meet their obligations and any such non-performance may delay clinical development or submission of products for regulatory approval, or otherwise impair our competitive position. Any significant problem experienced by one of our suppliers could result in a delay or interruption in the supply of materials to us until such supplier resolves the problem or an alternative source of supply is located. Any delay or interruption would likely lead to a delay or interruption of manufacturing operations, which could negatively affect our operations. Although we have identified alternative suppliers for our product candidates, we have not entered into contractual or other arrangements with them. If we needed to use an alternate supplier for any product, we would experience delays while we negotiated an agreement with them for the manufacture of such product. In addition, we may be unable to negotiate manufacturing terms with a new supplier as favorable as the terms we have with our current suppliers.

Problems with any manufacturing processes could result in product defects, which could require us to delay shipment of products or recall products previously shipped. In addition, any prolonged interruption in the operations of the manufacturing facilities of one of our sole-source suppliers could result in the cancellation of shipments. A number of factors could cause interruptions, including equipment malfunctions or failures, or damage to a facility due to natural disasters or otherwise. Because our manufacturing processes are or are expected to be highly complex and subject to a lengthy regulatory approval process, alternative qualified production capacity may not be available on a timely basis or at all. Difficulties or delays in our manufacturing could increase our costs and damage our reputation.

The manufacture of pharmaceutical products can be an expensive, time consuming, and complex process. Manufacturers often encounter difficulties in scaling-up production of new products, including quality control and assurance and shortages of personnel. Delays in formulation and scale-up to commercial quantities could result in additional expense and delays in our clinical trials, regulatory submissions, and commercialization.

Failure of Manufacturing Facilities Producing Our Product Candidates to Maintain Regulatory Approval Could Delay or Otherwise Hinder Our Ability to Market Our Product Candidates

Any manufacturer of our product candidates will be subject to applicable Good Manufacturing Practices (GMP) prescribed by the FDA or other rules and regulations prescribed by the CFDA and other foreign regulatory authorities. We and any of our collaborators may be unable to enter into or maintain relationships either domestically or abroad with manufacturers whose facilities and procedures comply or will continue to comply with GMP and who are able to produce our small molecules in accordance with applicable regulatory standards. Failure by a manufacturer of our products to comply with GMP could result in significant time delays or our inability to obtain marketing approval or, should we have market approval, for such approval to continue. Changes in our manufacturers could require new product testing and facility compliance inspections. In the United States, failure to comply with GMP or other applicable legal requirements can lead to federal seizure of violated products, injunctive actions brought by the federal government, inability to export product, and potential criminal and civil liability on the part of a company and its officers and employees.

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Risks Relating to Our Common Stock

The Market Price of Our Common Stock May Be Highly Volatile or May Decline Regardless of Our Operating Performance

Our common stock price has fluctuated from year-to-year and quarter-to-quarter and will likely continue to be volatile. During 2017, our stock price has ranged from $0.91 to $4.00. We expect that the trading price of our common stock is likely to be highly volatile in response to factors that are beyond our control. The valuations of many biotechnology companies without consistent product revenues and earnings are extraordinarily high based on conventional valuation standards, such as price to earnings and price to sales ratios. These trading prices and valuations may not be sustained. In the future, our operating results in a particular period may not meet the expectations of any securities analysts whose attention we may attract, or those of our investors, which may result in a decline in the market price of our common stock. Any negative change in the public’s perception of the prospects of biotechnology companies could depress our stock price regardless of our results of operations. These factors may materially and adversely affect the market price of our common stock.

Our Largest Holders Of Common Stock May Have Different Interests Than Our Other Stockholders

A small number of our stockholders hold a significant amount of our outstanding common stock. These stockholders may have interests that are different from the interests of our other stockholders. We cannot assure that our largest stockholders will not seek to influence our business in a manner that is contrary to our goals or strategies or the interests of our other stockholders. In addition, the significant concentration of ownership in our common stock may adversely affect the trading price for our common stock because investors often perceive disadvantages in owning stock in companies with significant stockholders. Our largest stockholders, if they acted together, could significantly influence all matters requiring approval by our stockholders, including the election of directors and the approval of mergers or other business combination transactions. Our largest stockholders together may be able to determine all matters requiring stockholder approval.

Subsequent Resales Of Shares Of Our Common Stock In The Public Market May Cause The Market Price Of Our Common Stock To Fall

The market value of our common stock could decline as a result of sales by investors from time to time, or perceptions that such sales may occur, of a substantial amount of the shares of common stock held by them.

Issuances of Additional Shares of Our Common Stock May Cause Substantial Dilution of Existing Stockholders

We may issue additional shares of common stock or other securities that are convertible into or exercisable for common stock in connection with future acquisitions, future sales of our securities for capital raising purposes, future strategic relationships, or for other business purposes. The future issuance of any additional shares of our common stock may create downward pressure on the trading price of our common stock. There can be no assurance that we will not be required to issue additional shares, warrants or other convertible securities in the future in conjunction with any capital raising efforts, including at a price (or exercise prices) below the price at which shares of our common stock are then traded.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 2. PROPERTIES.

As of December 31, 2017, we leased approximately 4,200 square feet of office space in Rockville, Maryland where our headquarters are located. In addition, as of December 31, 2017, we leased approximately 4,100 square feet of office space in Beijing, China where our China operations are based and approximately 11,000 square feet of laboratory space in Beijing, China. We believe that our facilities are adequate for current needs; however, the Company is in the process of expanding operations in China and, accordingly, intends to increase facilities to meet our foreseeable and long-term needs. We do not own any real property.

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ITEM 3. LEGAL PROCEEDINGS.

CASI is subject in the normal course of business to various legal proceedings in which claims for monetary or other damages may be asserted. Management does not believe such legal proceedings, unless otherwise disclosed herein, are material.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Market for Common Equity

The following table sets forth the high and low closing price for our common stock by quarter, as reported by the NASDAQ Capital Market, for the periods indicated:

Closing Prices
	HIGH		LOW
2017:
First Quarter	$	1.50	$	1.20
Second Quarter		1.35		0.91
Third Quarter		1.91		0.95
Fourth Quarter		4.00		1.71
2016:
First Quarter	$	1.45	$	0.68
Second Quarter		1.50		1.05
Third Quarter		1.22		0.84
Fourth Quarter		1.72		1.11

On March 26, 2018, the closing price of our common stock, as reported by The NASDAQ Capital Market, was $4.00 per share. As of March 26, 2018 there were approximately 315 holders of record of our common stock.

Dividend Policy

Since our initial public offering in 1996, we have not paid cash dividends on our common stock. We currently anticipate that any earnings will be retained for the continued development of our business and we do not anticipate paying any cash dividends on our common stock in the foreseeable future.

ITEM 6. SELECTED FINANCIAL DATA.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion should be read in conjunction with the Consolidated Financial Statements and Notes thereto appearing elsewhere in this report. See also “Risk Factors” in Item 1A of this Annual Report.

OVERVIEW

We are a U.S. based biopharmaceutical company dedicated to bringing high quality, cost-effective pharmaceutical products and innovative oncology therapeutics to patients. We intend to execute our plan to become a leading pharmaceutical company with a substantial market share in China. We are headquartered in Rockville, Maryland with established China operations that are expanding as we continue to further in-license or acquire products for our pipeline.

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Our product pipeline features (1) EVOMELA^®, MARQIBO^®, and ZEVALIN^®, all U.S. FDA approved drugs in-licensed from Spectrum Pharmaceuticals, Inc. for China regional rights, and currently in various stages in the regulatory process for market approval in China, (2) an acquired portfolio of 25 FDA-approved abbreviated new drug applications (“ANDAs”), one ANDA that FDA tentatively approved, and three ANDAs that are pending FDA approval, from which we will prioritize a select subset of product registration and commercialization in China, (3) our proprietary drug candidate, ENMD-2076, currently in Phase 2 clinical development, and (4) CASI-001 and CASI-002, proprietary early-stage candidates in immuno-oncology in preclinical development. We believe our pipeline reflects a risk-balanced approach between products in various stages of development, and between products that we develop ourselves and those that we develop with our partners for the China regional market. We intend to continue building a significant product pipeline of high quality, cost-effective pharmaceuticals, as well as innovative drug candidates that we will commercialize alone in China and with partners for the rest of the world. For in-licensed products, the Company uses a market-oriented approach to identify pharmaceutical candidates that it believes have the potential for gaining widespread market acceptance, either globally or in China, and for which development can be accelerated under the Company’s drug development strategy. For our FDA-approved ANDAs, we intend to select and commercialize certain products from the portfolio that offer unique market and cost-effective manufacturing opportunities in China and/or in the U.S. For ENMD-2076, our current development is focused on niche and orphan indications.

Our focus is to bring high quality, cost-effective pharmaceutical products and innovative oncology therapeutics to patients. The implementation of our plans will include leveraging our resources in both the United States and China. In order to capitalize on the drug development and capital resources available in China, we are doing business in China through our wholly-owned China-based subsidiary that will execute the China portion of our drug development strategy, including conducting clinical trials in China, pursuing local funding opportunities and strategic collaborations, and implementing our transition to a commercial enterprise.

Our primary focus is to acquire high quality, cost-effective medicines, as well as to in-license clinical-stage and late-stage drug candidates so that we can immediately employ our U.S. and China drug development model to accelerate commercialization, and clinical and regulatory progress. In addition to our high quality, cost-effective medicines, and our clinical-and late-stage approach for innovative products, we have other potential drug candidates in preclinical development which it will continue to evaluate in 2018.

Since inception, the Company has incurred significant losses from operations and has incurred an accumulated deficit of $452.7 million.  The Company restructured its business in 2012 in connection with an investment led by one of the Company’s largest stockholders, followed by implementation of a name change to reflect its core mission and business strategy.  The Company expects to continue to incur operating losses for the foreseeable future due to, among other factors, its continuing clinical activities. In March 2018, the Company entered into securities purchase agreements pursuant to which the Company is issuing 15,432,091 shares of its common stock with accompanying warrants to purchase 6,172,832 shares of its common stock in a $50 million private placement (the “2018 Strategic Financing”). To date, the Company has received gross proceeds of $29.3 million and expects to receive additional gross proceeds of $20.7 million in the near future. The 2018 Strategic Financing Closing included an investment from ETP Global Fund, L.P., a healthcare investment fund. The managing member of Emerging Technology Partners, LLC, which is the general partner of ETP Global Fund, L.P., is also the Executive Chairman of the Company. The 2018 Strategic Financing also included an investment from IDG-Accel China Growth Fund III L.P. (“IDG-Accel Growth”) and IDG-Accel China III Investors L.P. (“IDG-Accel Investors”). A director and shareholder of IDG-Accel China Growth Fund GP III Associates Ltd., which is the ultimate general partner of IDG-Accel Growth and IDG-Accel Investors, is also a board member of the Company. In October 2017, the Company entered into securities purchase agreements for an approximately $23.8 million strategic financing. The Company held its initial closing on October 17, 2017, a second closing on October 23, 2017 and a final closing on November 20, 2017 and received approximately $23.4 million in net proceeds, (collectively, the “2017 Closings”). Net proceeds from the 2018 Strategic Financing and the 2017 Closings are being used to prepare for the anticipated launch of the Company’s first commercial product in China, to support the Company’s business development activities, to advance the development of the Company’s pipeline, support its marketing and commercial planning activities, and for other general corporate purposes

As a result of the 2018 Strategic Financing and the 2017 Closings, the Company believes that it has sufficient resources to fund its operations at least through March 29, 2019. As of December 31, 2017, approximately $12.2 million of the Company’s cash balance was held by CASI China. We intend to continue to exercise tight controls over operating expenditures. In developing drug candidates, we intend to use and leverage resources available to us in both the United States and China. We intend to pursue additional financing opportunities as well as opportunities to raise capital through forms of non- or less- dilutive arrangements, such as partnerships and collaborations with organizations that have capabilities and/or products that are complementary to our capabilities and products in order to continue the development of our product candidates that we intend to pursue to commercialization.

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Additional funds raised by issuing equity securities may result in dilution to existing stockholders.

CRITICAL ACCOUNTING POLICIES AND THE USE OF ESTIMATES

The preparation of our financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. Our critical accounting policies, including the items in our financial statements requiring significant estimates and judgments, are as follows:

- Revenue Recognition - We recognize revenue in accordance with the provisions of authoritative guidance issued, whereby revenue is not recognized until it is realized or realizable and earned. Revenue is recognized when all of the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price to the buyer is fixed and determinable and collectibility is reasonably assured.

- Research and Development - Research and development expenses consist primarily of compensation and other expenses related to research and development personnel, research collaborations, costs associated with preclinical testing and clinical trials of our product candidates, including the costs of manufacturing drug substance and drug product, regulatory maintenance costs, and facilities expenses. Research and development costs are expensed as incurred.

- Expenses for Clinical Trials - Expenses for clinical trials are incurred from planning through patient enrollment to reporting of the data. We estimate expenses incurred for clinical trials that are in process based on patient enrollment and based on clinical data collection and management. Costs that are associated with patient enrollment are recognized as each patient in the clinical trial completes the enrollment process. Estimated clinical trial costs related to enrollment can vary based on numerous factors, including expected number of patients in trials, the number of patients that do not complete participation in a trial, and when a patient drops out of a trial. Costs that are based on clinical data collection and management are recognized in the reporting period in which services are provided. In the event of early termination of a clinical trial, we accrue an amount based on estimates of the remaining non-cancelable obligations associated with winding down the clinical trial.

- Stock-Based Compensation - All share-based payment transactions are recognized in the consolidated financial statements at their fair values. Compensation expense associated with service and performance condition-based stock options and other equity-based compensation is recorded in accordance with provisions of authoritative guidance. The fair value of awards whose fair values are calculated using the Black-Scholes option pricing model is generally being amortized on a straight-line basis over the requisite service period and is recognized based on the proportionate amount of the requisite service period that has been rendered during each reporting period. Share-based awards granted to employees with a performance condition are measured based on the probable outcome of that performance condition during the requisite service period. Such an award with a performance condition will be expensed if it is probable that a performance condition will be achieved. For the years ended December 31, 2017 and 2016, $30,500 and $10,100, respectively, was expensed for share awards with performance conditions that became probable during that period. Using the straight-line expense attribution method over the requisite service period, which is generally the option vesting term ranging from immediately to one to three years, share-based compensation expense recognized for the years ended December 31, 2017 and 2016 totaled approximately $650,000 and $2,995,000, respectively.

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The determination of fair value of stock-based payment awards on the date of grant using the Black-Scholes valuation model is affected by our stock price, as well as the input of other subjective assumptions. These assumptions include, but are not limited to, the expected forfeiture rate and expected term of stock options and our expected stock price volatility over the term of the awards. Changes in the assumptions can materially affect the fair value estimates.

Any future changes to our share-based compensation strategy or programs would likely affect the amount of compensation expense recognized.

- Fair Value Measurements - At each reporting period, we perform a detailed analysis of our assets and liabilities that are measured at fair value. All assets and liabilities for which the fair value measurement is based on significant unobservable inputs or instruments which trade infrequently and therefore have little or no price transparency are classified as Level 3 in accordance with the hierarchy established by U.S. GAAP.  As of December 31, 2017, the Contingent Rights had been fully settled resulting a zero balance at the end of 2017.  In measuring the fair value of financial instruments at every balance sheet date, we used Level 3 unobservable inputs, including such inputs as our estimated borrowing rate and our future capital requirements, and the timing, probability, size and characteristics of those capital raises, among other inputs.

RESULTS OF OPERATIONS

Years Ended December 31, 2017 and 2016.

Revenues and Cost of Product Sales. There were no revenues recorded for the years ended December 31, 2017 and 2016.

Research and Development Expenses. Our 2017 research and development expenses totaled $7,595,000 as compared to $4,646,000 in 2016, a 63% increase. In 2017, our research and development expenses reflect direct project costs of $856,000 for ENMD-2076, $3,603,000 for drugs in-licensed from Spectrum, and $1,301,000 for preclinical development activities primarily in China. The 2016 amount reflects direct project costs for ENMD-2076 of $1,696,000, $547,000 for drugs in-licensed from Spectrum, and $862,000 for preclinical development activities primarily in China. The increase in 2017 research and development spending primarily reflects higher costs associated with the quality testing phase of the CFDA regulatory review of ZEVALIN^® and EVOMELA^® in 2017.

At December 31, 2017, and, since acquired, accumulated direct project expenses for ENMD-2076 totaled $28,511,000, $4,536,000 for drugs in-licensed from Spectrum, and for preclinical development activities primarily in China, accumulated project expenses totaled $3,356,000. Our research and development expenses also include non-cash stock-based compensation totaling $272,000 and $746,000, respectively, for 2017 and 2016. The balance of our research and development expenditures includes facility costs and other departmental overhead, and expenditures related to the non-clinical support of our programs.

We expect the majority of our research and development expenses in 2018 to be devoted to advancing our in-licensed products towards market approval in China, the technology transfer activities and regulatory support associated with our ANDA portfolio, and our early-stage candidates in preclinical development. We expect our expenses in 2018 to increase based on our commercial and clinical development plan. Completion of clinical development may take several years or more, but the length of time generally varies substantially according to the type, complexity, novelty and intended use of a product candidate.

We estimate that clinical trials of the type we generally conduct are typically completed over the following timelines:

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Global FDA Trial:

CLINICAL PHASE	ESTIMATED COMPLETION PERIOD
Phase 1	1-2 Years
Phase 2	2-3 Years
Phase 3	2-4 Years

Local CFDA Trial:

CLINICAL PHASE	ESTIMATED COMPLETION PERIOD
Phase 1	1 Year
Phase 2	2 Years
Phase 3	2-3 Years

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.

We test our potential product candidates in numerous preclinical studies to identify indications for which they may be product candidates. 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 indications in order to focus our resources on more promising indications.

Our proprietary product candidates have also not yet achieved 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, regulatory agencies must conclude that our clinical data establish safety and efficacy. Historically, the results from preclinical testing 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.

Our business strategy includes being opportunistic with collaborative arrangements with third parties to complete the development and commercialization of our product candidates. In the event that third parties take over the clinical trial process for one of our product candidates, the estimated completion date would largely be under the control of that third party rather than us. We cannot forecast with any degree of certainty which proprietary products or indications, if any, will be subject to future collaborative arrangements, in whole or in part, and how such arrangements would affect our capital requirements.

As a result of the uncertainties discussed above, among others, we are unable to estimate the duration and completion costs of our research and development projects. Our inability to complete our research and development projects in a timely manner or our failure to enter into collaborative agreements, when appropriate, could significantly increase our capital requirements and could adversely impact our liquidity. These uncertainties could force us to seek additional, external sources of financing from time to time in order to continue with our business strategy. There can be no assurance that we will be able to successfully access external sources of financing in the future. Our inability to raise additional capital, or to do so on terms reasonably acceptable to us, would jeopardize the future success of our business.

Research and development expenses consist primarily of compensation and other expenses related to research and development personnel, research collaborations, costs associated with internal and contract preclinical testing and clinical trials of our product candidates, including the costs of manufacturing drug substance and drug product, regulatory maintenance costs, and facilities expenses. Overall research and development expenses increased to $7,595,000 in 2017 from $4,646,000 in 2016.

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The fluctuations in research and development expenses were specifically impacted by the following:

- Outside Services – We utilize outsourcing to conduct our product development activities. We spent $333,000 in 2017 and $302,000 in 2016. The increase in 2017 is primarily associated with higher costs associated with our pre-clinical activities.

- Clinical Trial Costs – Clinical trial costs, which include clinical site fees, monitoring costs and data management costs, decreased to $417,000 in 2017 from $1,219,000 in 2016. This decrease primarily relates to higher enrollment patient costs and clinical trial management costs associated with our Phase 2 clinical trial in advanced fibrolamellar carcinoma (FLC) during the 2016 period.

- Lab Supplies – Laboratory supplies associated with our pre-clinical activities increased to $294,000 in 2017 from $177,000 in 2016 due to the expansion of activities in our China research and development lab in 2017.

- Contract Manufacturing Costs – The costs of manufacturing or acquiring the material used in clinical trials for our product candidates is reflected in contract manufacturing. These costs include bulk manufacturing, encapsulation and fill and finish services, and product release costs. Contract manufacturing costs increased in 2017 to $2,987,000 from $229,000 in 2016. The increase in 2017 primarily reflects costs associated with the purchase of ZEVALIN^® and EVOMELA^® in 2017 from our partner Spectrum for CFDA quality testing purposes to support CASI’s application for import drug registration during 2017.

- Personnel Costs – Personnel costs increased to $2,644,000 in 2017 from $1,960,000 in 2016. This variance is primarily attributed to increased salary and benefit costs associated with new employees in China and our new Chief Medical Officer in the U.S. in 2017, offset by a decrease in non-cash stock-based compensation expense totaling $474,000 in 2017 compared to 2016.

- Also reflected in our 2017 research and development expenses are outsourced consultant costs of $213,000 and facility and related expenses of $485,000. In 2016, these expenses totaled $300,000 and $328,000, respectively. The decrease in outsourced consultant costs reflects lower costs associated with clinical trial management and evaluation and regulatory activities in the U.S. The increase in facilities and related expenses is due to new leased lab space in China in 2017.

General and Administrative Expenses. General and administrative expenses include compensation and other expenses related to finance, business development and administrative personnel, professional services and facilities.

General and administrative expenses decreased to $3,156,000 in 2017 from $4,775,000 in 2016. This decrease is primarily related to a decrease of $1,871,000 in stock-based compensation expense, primarily related to stock options awarded in connection with the closings of the Company’s strategic financing in 2016, offset by an increase in salary and benefits associated with U.S. employees, including new business development employees in 2017.

Interest (income) expense, net. Interest expense, net for the years ended December 31, 2017 and 2016 was $(1,009) and $26,090, respectively. This includes interest expense on our note payable of $7,500 for both years; non-cash interest expense of $7,476 and $26,308, respectively, representing the amortization of the debt discount; offset by interest income of $15,985 and $7,718, respectively.

Change in fair value of contingent rights. The Contingent Rights issued to Spectrum in connection with the license arrangements are considered derivative liabilities and were recorded initially at their estimated fair value, and are marked to market each reporting period until settlement. The change in fair value of the Contingent Rights for the years ended December 31, 2017 and 2016 was $19,891 and $6,788, respectively.

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LIQUIDITY AND CAPITAL RESOURCES

To date, we have been engaged primarily in research and development activities. As a result, we have incurred and expect to continue to incur operating losses in 2018 and the foreseeable future before we commercialize any products and penetrate significant markets such as China. Based on our current plans, we expect our current available cash and cash equivalents to meet our cash requirements for at least through March 29, 2019.

We will require significant additional funding to fund operations until such time, if ever, we become profitable. We intend to augment our cash balances by pursuing other forms of capital infusion, including strategic alliances or collaborative development opportunities with organizations that have capabilities and/or products that are complementary to our capabilities and products in order to continue the development of our potential product candidates that we intend to pursue to commercialization. If we seek strategic alliances, licenses, or other alternative arrangements, such as arrangements with collaborative partners or others, to raise further financing, we may need to relinquish rights to certain of our existing product candidates, or products we would otherwise seek to develop or commercialize on our own, or to license the rights to our product candidates on terms that are not favorable to us.

We will continue to seek to raise additional capital to fund our commercialization efforts, research and development, and the clinical development of ENMD-2076 and new product candidates, if any. We intend to explore one or more of the following alternatives to raise additional capital:

· selling additional equity securities;

· out-licensing product candidates to one or more corporate partners;

· completing an outright sale of non-priority assets; and/or

· engaging in one or more strategic transactions.

We also will continue to manage our cash resources prudently and cost-effectively.

There can be no assurance that adequate additional financing under such arrangements will be available to us on terms that we deem acceptable, if at all. If additional funds are raised by issuing equity securities, dilution to existing shareholders may result, or the equity securities may have rights, preferences, or privileges senior to those of the holders of our common stock. If we fail to obtain additional capital when needed, we may be required to delay or scale back our commercialization efforts, our advancement of the Spectrum products, and our Phase 2 plans for ENMD-2076 or plans for other product candidates, if any.

At December 31, 2017, we had cash and cash equivalents of approximately $43.5 million, with working capital of approximately $38.8 million. As of December 31, 2017, approximately $12.2 million of the Company’s cash balance was held by the Company’s wholly-owned subsidiary in China. As previously disclosed, on January 26, 2018 the Company paid $18 million for a portfolio of 25 U.S. FDA-approved ANDAs, one ANDA that FDA tentatively approved, and three ANDAs that are pending FDA approval.

As a result of the Company’s acquisition of a portfolio of ANDAs, we believe that this transaction provides significant and permanent changes to our operations in China, allowing our subsidiary in China to generate operating revenues from the China marketplace in the future and potentially to sustain their own operations without the necessity of parent support.  Accordingly, effective January 1, 2018, the functional currency of the Company’s subsidiary based in China has been changed to the local currency of the China RMB. The Company does not expect this change in functional currency will have a material impact on the consolidated financial statements

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FINANCING ACTIVITIES

“Shelf” Registration Statement

On December 13, 2017, we filed a Form S-3 registration statement with the SEC utilizing a “shelf” registration process. On December 22, 2017, the Form S-3 registration statement was declared effective by the SEC. Pursuant to this shelf registration statement, we may sell debt or equity securities in one or more offerings up to a total public offering price of $100 million. We believe that this shelf registration statement currently provides us additional flexibility with regard to potential financings that we may undertake when market conditions permit or our financial condition may require.

Securities Purchase Agreements

As discussed above, on March 19, 2018, the Company entered into securities purchase agreements (the “Securities Purchase Agreements”) with certain institutional investors, accredited investors and current stockholders, pursuant to which the Company is issuing 15,432,091 shares of its common stock with accompanying warrants to purchase 6,172,832 shares of its common stock in a $50 million private placement. To date, the Company has received gross proceeds of $29.3 million and expects to receive additional gross proceeds of $20.7 million in the near future. The purchase price for each share of common stock and warrant was $3.24. The warrants will become exercisable 180 days after issuance at a $3.69 per share exercise price, and will expire five years from the date of issuance. The Securities Purchase Agreements and warrants each include additional customary representations, warranties and covenants. The Company also agreed to file a resale registration within 120 days following the closing covering the shares of common stock issued and the shares of common stock underlying the warrants.

Additionally, as discussed above, on October 13, 2017, the Company entered into securities purchase agreements with certain institutional investors, accredited investors and current stockholders pursuant to which the Company agreed to sell 7,951,865 shares of its common stock and warrants exercisable for up to 1,590,373 shares of its common stock (exclusive of the Agent Warrants described below) in a registered direct offering (the “2017 Offering”) for gross proceeds of $23,855,595. As a result of the 2017 Closings related to the 2017 Offering, the Company received approximately $23.4 million after offering expenses and issued 7,951,865 shares of common stock. The shares and warrants were sold together, consisting of one share of common stock and a warrant to purchase 0.20 shares of common stock for each share of common stock purchased, at a combined offering price of $3.00. The warrants are exercisable beginning on April 17, 2018 and expire on April 17, 2020. The warrants have an exercise price of $3.75 per share. The fair value of the warrants issued is $1,558,566, calculated using the Black-Scholes-Merton valuation model value of $0.98 with a contractual life of 2.5 years, an assumed volatility of 85.4%, and a risk-free interest rate of 1.54%.

In connection with the 2017 Offering, the Company issued to its placement agent or its designees warrants to purchase 48,133 shares of common stock at an exercise price of $3.75 per share of common stock (the “Agent Warrants”), representing the number of warrants equal to an aggregate of 4% of the number of shares sold to investors placed by the placement agent in the 2017 Offering, excluding investments made by certain China-focused investors that were placed by the Company. The Agent Warrants are exercisable beginning on April 17, 2018 and expire on April 17, 2019. The fair value of the warrants issued is $28,880, calculated using the Black-Scholes-Merton valuation model value of $0.60 with a contractual life of 1.5 years, an assumed volatility of 77.8%, and a risk-free interest rate of 1.54%.

Common Stock Sales Agreement

On February 23, 2018, the Company entered into a Common Stock Sales Agreement (the “Sales Agreement”) with H.C. Wainwright & Co., LLC (“HCW”). Pursuant to the terms of the Sales Agreement, the Company may sell from time to time, at its option, shares of the Company’s common stock, through HCW, as sales agent, with an aggregate sales price of up to $25 million (the “Shares”).

Any sales of Shares pursuant to the Sales Agreement will be made under the Company’s effective “shelf” registration statement (the “Registration Statement”) on Form S-3 (File No. 333-222046) which became effective on December 22, 2017 and the related prospectus supplement and the accompanying prospectus, as filed with the Securities and Exchange Commission (the “SEC”) on February 23, 2018.

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Under the terms of the Sales Agreement, the Company may sell shares of its common stock through HCW by any method permitted that is deemed an “at the market offering” as defined in Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”). HCW will use its commercially reasonable efforts consistent with its normal trading and sales practices to sell the Company’s common stock from time to time, based upon the Company’s instructions (including any price, time or size limits or other customary parameters or conditions the Company may impose). Actual sales will depend on a variety of factors to be determined by the Company from time to time, including (among others) market conditions, the trading price of the Company’s common stock, capital needs and determinations by the Company of the appropriate sources of funding for the Company. The Company is not obligated to make any sales of common stock under the Sales Agreement and the Company cannot provide any assurances that it will issue any shares pursuant to the Sales Agreement. The Company will pay a commission rate of up to 3.0% of the gross sales price per share sold and agreed to reimburse HCW for certain specified expenses. The Company has also agreed pursuant to the Sales Agreement to provide HCW with customary indemnification and contribution rights.

The Company or HCW upon notice to the other, may suspend the offering of the Shares under the Sales Agreement at any time. The offering of the Shares pursuant to the Sales Agreement will terminate upon the sale of Shares in an aggregate offering amount equal to $25 million, or sooner if either the Company or HCW terminate the Sales Agreement pursuant to its terms.

Through March 2018, the Company issued 143,248 Shares under the Sales Agreement resulting in net proceeds to the Company of approximately $475,000.

INFLATION AND INTEREST RATE CHANGES

Management does not believe that our working capital needs are sensitive to inflation and changes in interest rates.

TABLE OF CONTRACTUAL OBLIGATIONS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

OFF-BALANCE-SHEET ARRANGEMENTS

We had no off-balance sheet arrangements during fiscal year 2017.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The response to this item is submitted in a separate section of this report. See Index to Consolidated Financial Statements on page F-1.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

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ITEM 9A. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

As of December 31, 2017, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Principal Accounting Officer (our principal executive officer and principal financial officer, respectively) and our Chief Operating Officer & General Counsel, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)). Our Chief Executive Officer, Principal Accounting Officer and Chief Operating Officer & General Counsel have concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and that such information is accumulated and communicated to our management (including our Chief Executive Officer, Principal Accounting Officer, and Chief Operating Officer & General Counsel) to allow timely decisions regarding required disclosures. Based on such evaluation, our Chief Executive Officer, Principal Accounting Officer, and Chief Operating Officer & General Counsel have concluded these disclosure controls are effective as of December 31, 2017.

Changes in Internal Control Over Financial Reporting

There have not been any changes in our internal control over financial reporting during the fiscal quarter ended December 31, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Securities Exchange Act Rules 13a-15(f) and 15d-15(f). Our internal control over financial reporting is designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation and fair presentation of financial statements for external purposes in accordance with generally accepted accounting principles. Any internal control over financial reporting, no matter how well designed, has inherent limitations. As a result of these inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those internal controls determined to be effective can provide only reasonable assurance with respect to reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Under the supervision and with the participation of our management, including our Chief Executive Officer, Chief Operating Officer & General Counsel and Principal Accounting Officer, we conducted an assessment of the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework 2013. Based on our assessment, we concluded that our internal control over financial reporting was effective as of December 31, 2017.

ITEM 9B. OTHER INFORMATION.

Our 2018 Annual Meeting of Stockholders will be held on June 11, 2018. Further information will be provided in our proxy statement that will be filed with the SEC and mailed to stockholders of record as soon as practicable.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

The information required under this item is incorporated herein by reference to the Company’s definitive proxy statement pursuant to Regulation 14A, which proxy statement will be filed with the SEC not later than 120 days after the close of the Company’s fiscal year ended December 31, 2017.

We have adopted a Code of Ethics, as defined in applicable SEC rules, that applies to directors, officers and employees, including our principal executive officer and principal accounting officer. The Code of Ethics is available on the Company’s website at www.casipharmaceuticals.com.

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ITEM 11. EXECUTIVE COMPENSATION.

The information required under this item is incorporated herein by reference to the Company’s definitive proxy statement pursuant to Regulation 14A, which proxy statement will be filed with the SEC not later than 120 days after the close of the Company’s fiscal year ended December 31, 2017.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The information required under this item, with the exception of information relating to compensation plans under which equity securities of the Company are authorized for issue, which appears below, is incorporated herein by reference to the Company’s definitive proxy statement pursuant to Regulation 14A, which proxy statement will be filed with the SEC not later than 120 days after the close of the Company’s fiscal year ended December 31, 2017.

Options under Employee Benefit Plans The following table discloses certain information about the options issued and available for issuance under all outstanding Company option plans, as of December 31, 2017.

	(a)		(b)		(c)
Plan category	Number of securities to be issued upon exercise of outstanding options,  warrants and rights		Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans [excluding securities reflected in column (a)]
Equity compensation plans approved by security holders		11,585,315	$	1.42		2,852,234
Equity compensation plans not approved by security holders		0	$	0.00		0
Total		11,585,315	$	1.42		2,852,234

Warrants issued under the unauthorized plans represent compensation for consulting services rendered by the holders.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

The information required under this item is incorporated herein by reference to the Company’s definitive proxy statement pursuant to Regulation 14A, which proxy statement will be filed with the SEC not later than 120 days after the close of the Company’s fiscal year ended December 31, 2017.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

The information required under this item is incorporated herein by reference to the Company’s definitive proxy statement pursuant to Regulation 14A, which proxy statement will be filed with the SEC not later than 120 days after the close of the Company’s fiscal year ended December 31, 2017.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) 1. FINANCIAL STATEMENTS – See index to Consolidated Financial Statements.

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2. Schedules

All financial statement schedules are omitted because they are not applicable, not required under the instructions or all the information required is set forth in the financial statements or notes thereto.

3. Exhibits

1.1 Engagement Letter, dated as of October 12, 2017, by and between CASI Pharmaceuticals, Inc. and H.C. Wainwright & Co., LLC (incorporated by reference to Exhibit 1.1 of our Form 8-K filed with the Securities and Exchange Commission on October 19, 2017)

2.1 Agreement and Plan of Merger, dated as of December 22, 2005 among EntreMed, Inc., E.M.K. Sub, Inc., Miikana Therapeutics, Inc., and Andrew Schwab (incorporated by reference to Exhibit 2.1 of our Form 8-K filed with the Securities and Exchange Commission on December 29, 2005)

3.1 Amended and Restated Certificate of Incorporation of EntreMed, Inc. (incorporated by reference to Exhibit 3.1 of our Form 10-Q for the quarter ended June 30, 2006 filed with the Securities and Exchange Commission)

3.2 Certificate of Amendment to Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of our Form 8-K filed with the Securities and Exchange Commission on July 7, 2010)

3.3 Amended and Restated Bylaws of EntreMed, Inc. (incorporated by reference to Exhibit 3.1 of our Form 8-K filed with the Securities and Exchange Commission on December 12, 2007)

3.4 Certificate of Amendment to Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of our Form 8-K filed with the Securities and Exchange Commission on June 13, 2014)

4.1 Certificate of Elimination of Series A Preferred Stock filed with the Secretary of State of Delaware on September 13, 2012. (Incorporated by reference to Exhibit 3.1 of our Form 8-K filed with the Securities and Exchange Commission on September 20, 2012.)

4.2 Form of Common Stock Purchase Warrant (incorporated by reference to Exhibit 10.1 of our Form 8-K filed with the Securities and Exchange Commission on January 26, 2012)

4.3 Form of Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.1 of our Form 8-K filed with the Securities and Exchange Commission on March 6, 2013)

4.4 Form of Agent’s Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.2 of our Form 8-K filed with the Securities and Exchange Commission on March 6, 2013)

4.5 Form of Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.2 (included in Exhibit 10.1) of our Form 10-Q filed with the Securities and Exchange Commission on November 13, 2015)

4.6 Certificate of Designation of Series A Preferred Stock (incorporated by reference to Exhibit 4.1 of our Form 8-K filed with the Securities and Exchange Commission on September 19, 2014)

4.7 Secured Promissory Note, dated as of September 17, 2014, issued to Talon Therapeutics, Inc. (incorporated by reference to Exhibit 4.2 of our Form 8-K filed with the Securities and Exchange Commission on September 19, 2014)

4.8 First Amendment to Secured Promissory Note, dated as of September 28, 2015, by and between CASI Pharmaceuticals, Inc. and Talon Therapeutics, Inc. (incorporated by reference to Exhibit 4.2 of our Form 8-K filed with the Securities and Exchange Commission on October 1, 2015)

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4.9 Second Amendment to Secured Promissory Note, dated as of December 13, 2016, by and between CASI Pharmaceuticals, Inc. and Talon Therapeutics, Inc. (incorporated by reference to Exhibit 4.3 of our Form 8-K filed with the Securities and Exchange Commission on December 16, 2016)

4.10 Form of Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.1 of our Form 8-K filed with the Securities and Exchange Commission on October 19, 2017)

4.11 Form of Wainwright Warrant (incorporated by reference to Exhibit 4.2 of our Form 8-K filed with the Securities and Exchange Commission on October 19, 2017)

4.12 Third Amendment to Secured Promissory Note, dated as of December 20, 2017, by and between CASI Pharmaceuticals, Inc. and Talon Therapeutics, Inc. (incorporated by reference to Exhibit 4.4 of our Form 8-K filed with the Securities and Exchange Commission on December 22, 2017)

4.13 Form of Warrant (incorporated by reference to Exhibit 4.1 of our Form 8-K filed with the Securities and Exchange Commission on March 23, 2018)

10.1 License Agreement between Celgene Corporation and EntreMed, Inc. signed December 9, 1998 regarding thalidomide intellectual property + (incorporated by reference to Exhibit 10.28 of our Form 10-K for the year ended December 31, 1998 filed with the Securities and Exchange Commission)

10.2 Lease Agreement between EntreMed, Inc. and Red Gate III Limited Partnership, dated June 10, 1998 (incorporated by reference to Exhibit 10.31 our Form 10-K for the year ended December 31, 1998 filed with the Securities and Exchange Commission)

10.3 EntreMed, Inc. 2001 Long-Term Incentive Plan* (incorporated by reference to Appendix A to our Definitive Proxy Statement filed with the Securities and Exchange Commission on May 12, 2006)

10.4.1 Purchase Agreement between Bioventure Investments kft and EntreMed, Inc., dated June 15, 2001+ (incorporated by reference to Exhibit 10.39.1 of our Form 10-Q for the quarter ended June 30, 2001 filed with the Securities and Exchange Commission)

10.4.2 Amendment 1 to Purchase Agreement between Bioventure Investments kft and EntreMed, Inc., dated July 13, 2001(incorporated by reference to Exhibit 10.39.2 of our Form 10-Q for the quarter ended June 30, 2001 filed with the Securities and Exchange Commission)

10.4.3 Amendment 2 to Purchase Agreement between Bioventure Investments kft and EntreMed, Inc., dated July 30, 2001(incorporated by reference to Exhibit 10.39.3 of our Form 10-Q for the quarter ended June 30, 2001 filed with the Securities and Exchange Commission)

10.4.4 Amendment 3 to Purchase Agreement between Bioventure Investments kft and EntreMed, Inc., dated August 3, 2001 (incorporated by reference to Exhibit 10.39.4 of our Form 10-Q for the quarter ended June 30, 2001 filed with the Securities and Exchange Commission)

10.5 EntreMed, Inc. 2001 Long Term Incentive Plan Non-Qualified Stock Option Grant Agreement (Director)* (incorporated by reference to Exhibit 10.7 of our Form 8-K filed with the Securities and Exchange Commission on April 17, 2007)

10.6 EntreMed, Inc. 2001 Long Term Incentive Plan Non-Qualified Stock Option Grant Agreement (Non-Director Employee)* (incorporated by reference to Exhibit 10.8 of our Form 8-K filed with the Securities and Exchange Commission on April 17, 2007)

10.7 Form of Change in Control Agreement* (incorporated by reference to Exhibit 10.1 of our Form 8-K filed with the Securities and Exchange Commission on April 17, 2007)

10.8 Employment Agreement by and between EntreMed and Cynthia W. Hu, dated as of June 1, 2006* (incorporated by reference to Exhibit 10.1 of Form 8-K filed with the Securities and Exchange Commission on June 6, 2006)

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10.9 Amendment to Employment Agreement by and between the Company and Cynthia W. Hu, effective April 16, 2007* (incorporated by reference to Exhibit 10.5 of our Form 8-K filed with the Securities and Exchange Commission on April 17, 2007)

10.10 Form of Restricted Stock Award under EntreMed, Inc. 2001 Long Term Incentive Plan* (incorporated by reference to Exhibit 10.2 of our Form 8-K filed with the Securities and Exchange Commission on March 11, 2005)

10.11 License Agreement between EntreMed and Celgene Corporation signed March 23, 2005 regarding the development and commercialization of Celgene’s small molecule tubulin inhibitor compounds for the treatment of cancer+ (incorporated by reference to Exhibit 10.25 of our Form 10-Q for the quarter ended March 31, 2005 filed with the Securities and Exchange Commission)

10.12 Securities Purchase Agreement, dated September 7, 2010 by and between EntreMed, Inc. and the investors party thereto (incorporated by reference to Exhibit 10.1 of our Form 8-K filed with the Securities and Exchange Commission on September 10, 2010)

10.13 Employment Agreement, by and between EntreMed, Inc. and Sara Capitelli, dated as of January 10, 2011* (incorporated by reference to Exhibit 10.33 of our Form 10-K for the fiscal year ended December 31, 2010 filed with the Securities and Exchange Commission)

10.14 Convertible Note and Warrant Purchase Agreement, dated January 20, 2012, by and among EntreMed, Inc. and the investors party thereto (incorporated by reference to Exhibit 10.1 of our Form 8-K filed with the Securities and Exchange Commission on January 26, 2012)

10.15 Securities Purchase Agreement, dated March 1, 2013, by and among EntreMed, Inc. and the investors thereto (incorporated by reference to Exhibit 10.1 of our Form 8-K filed with the Securities and Exchange Commission on March 6, 2013)

10.16 Employment Agreement by and between EntreMed, Inc. and Ken K. Ren, dated as of April 2, 2013* (incorporated by reference to Exhibit 10.1 of our Form 10-Q filed with the Securities and Exchange Commission on May 15, 2013)

10.17 Investment Agreement, dated as of September 17, 2014, by and between CASI Pharmaceuticals, Inc. and Spectrum Pharmaceuticals, Inc. (incorporated by reference to Exhibit 10.1 of our Form 8-K filed with the Securities and Exchange Commission on September 19, 2014)

10.18 Investment Agreement, dated as of September 17, 2014, by and between CASI Pharmaceuticals, Inc. the Company and Spectrum Pharmaceuticals Cayman, L.P (incorporated by reference to Exhibit 10.2 of our Form 8-K filed with the Securities and Exchange Commission on September 19, 2014)

10.19 License Agreement, dated as of September 17, 2014, by and between CASI Pharmaceuticals, Inc. and Spectrum Pharmaceuticals, Inc. + (incorporated by reference to Exhibit 10.3 of our Form 10-Q/A filed with the Securities and Exchange Commission on January 21, 2015)

10.20 License Agreement, dated as of September 17, 2014, by and between CASI Pharmaceuticals, Inc. and Spectrum Pharmaceuticals Cayman, L.P. + (incorporated by reference to Exhibit 10.4 of our Form 10-Q/A filed with the Securities and Exchange Commission on January 21, 2015)

10.21 License Agreement, dated as of September 17, 2014, by and between CASI Pharmaceuticals, Inc. and Talon Therapeutics, Inc. + (incorporated by reference to Exhibit 10.5 of our Form 10-Q/A filed with the Securities and Exchange Commission on January 21, 2015)

10.22 CASI Pharmaceuticals, Inc. 2011 Long-Term Incentive Plan, as amended* (incorporated by reference to Appendix A to the Company’s Definitive Proxy Statement filed with the Securities and Exchange Commission on April 14, 2017)

10.23 Form of Securities Purchase Agreement, dated September 20, 2015, by and among CASI Pharmaceuticals, Inc. and the investors thereto (incorporated by reference to Exhibit 10.1 of our Form 10-Q filed with the Securities and Exchange Commission on November 13, 2015)

39

10.24 Employment Agreement by and between CASI Pharmaceuticals, Inc. and Alex Zukiwski, dated as of April 3, 2017 * (incorporated by reference to Exhibit 10.1 of our Form 10-Q filed with the Securities and Exchange Commission on August 14, 2017)

10.25 Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 of our Form 8-K filed with the Securities and Exchange Commission on October 19, 2017)

10.26 Asset Purchase Agreement, dated as of January 26, 2018, by and between CASI Pharmaceuticals, Inc. and Sandoz Inc. + **

10.27 Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 of our Form 8-K filed with the Securities and Exchange Commission on March 23, 2018)

23.1 Consent of Independent Registered Public Accounting Firm

31.1 Rule 13a-14(a) Certification of Chief Executive Officer

31.2 Rule 13a-14(a) Certification of Principal Accounting Officer

32.1 Rule 13a-14(b) Certification by Chief Executive Officer

32.2 Rule 13a-14(b) Certification by Principal Accounting Officer

101** Interactive Data Files The following financial information from the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2017, formatted in eXtensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets as of December 31, 2017 and 2016, (ii)  Consolidated Statements of Operations for the years ended December 31, 2017 and 2016, (iii)  Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2017 and 2016 (iv)  Consolidated Statements of Cash Flows for the years ended December 31, 2017 and 2016 and (v) Notes to Consolidated Financial Statements.

* Management Contract or any compensatory plan, contract or arrangement.

+ Certain portions of this exhibit have been omitted based upon a request for confidential treatment under 17 C.F.R. §§200.80(b)(4) and 230.406. The confidential portions of this exhibit have been omitted and are marked accordingly. The confidential portions have been filed separately with the Commission pursuant to our confidential treatment request.

** Filed herewith

40

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

Date: March 29, 2018
	CASI Pharmaceuticals, Inc.
	By:	/s/ Ken K. Ren
		Ken K. Ren
		Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1934, this report has been signed below by the following persons in the capacities and on the dates indicated.

SIGNATURE	TITLE	DATE
/s/ Ken K. Ren	Chief Executive Officer and Director	March 29, 2018
Ken K. Ren	(Principal Executive Officer)
/s/ Sara B. Capitelli	Principal Accounting Officer	March 29, 2018
Sara B. Capitelli
/s/ Wei-Wu He	Executive Chairman	March 29, 2018
Wei-Wu He
/s/ James Z. Huang	Director	March 29, 2018
James Z. Huang
/s/ Franklin C. Salisbury	Director	March 29, 2018
Franklin C. Salisbury
/s/ Rajesh C. Shrotriya	Director	March 29, 2018
Rajesh C. Shrotriya
/s/ Y. Alexander Wu	Director	March 29, 2018
Y. Alexander Wu
/s/ Quan Zhou	Director	March 29, 2018
Quan Zhou

41

The following consolidated financial statements of CASI Pharmaceuticals, Inc. are included in Item 8:

Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets as of December 31, 2017 and 2016	F-3
Consolidated Statements of Operations for the years ended December 31, 2017 and 2016	F-4
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2017 and 2016	F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2017 and 2016	F-6
Notes to Consolidated Financial Statements	F-7

F-1

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

CASI Pharmaceuticals, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of CASI Pharmaceuticals, Inc. and subsidiaries (the “Company”) as of December 31, 2017 and 2016, and the related consolidated statements of operations, stockholders’ equity and cash flows for the years then ended, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. Federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to fraud or error. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purposes of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ CohnReznick LLP

We have served as the Company’s auditor since 2012.

Roseland, New Jersey

March 29, 2018

F-2

CASI Pharmaceuticals, Inc.

Consolidated Balance Sheets

	DECEMBER 31,
	2017			2016
ASSETS
Current assets:
Cash and cash equivalents	$	43,489,935		$	27,092,928
Prepaid expenses and other		322,493			355,891
Total current assets		43,812,428			27,448,819
Property and equipment, net		1,046,514			229,591
Other assets		242,023			34,485
Total assets	$	45,100,965		$	27,712,895
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	2,087,770		$	1,064,626
Payable to related party		2,228,366			-
Accrued liabilities		745,961			250,950
Total current liabilities		5,062,097			1,315,576
Note payable, net of discount		1,498,754			1,491,278
Contingent rights derivative liability		-			4,122,266
Total liabilities		6,560,851			6,929,120
Commitments and contingencies
Stockholders’ equity:
Convertible preferred stock, $1.00 par value; 5,000,000 shares authorized and 0 shares issued and outstanding at December 31, 2017 and 2016		-			-
Common stock, $.01 par value: 170,000,000 shares authorized at December 31, 2017 and 2016; 69,901,625 shares and 60,276,119 shares issued at December 31, 2017 and 2016, respectively		699,015			602,760
Additional paid-in capital		498,577,372			470,147,086
Treasury stock, at cost: 79,545 shares held at December 31, 2017 and 2016		(8,034,244	)		(8,034,244	)
Accumulated deficit		(452,702,029	)		(441,931,827	)
Total stockholders’ equity		38,540,114			20,783,775
Total liabilities and stockholders’ equity	$	45,100,965		$	27,712,895

See accompanying notes.

F-3

CASI Pharmaceuticals, Inc.

Consolidated Statements of Operations

	YEAR ENDED DECEMBER 31,
	2017			2016
Revenues:
Product sales	$	-		$	-
		-			-
Costs and expenses:
Research and development		7,595,182			4,645,560
General and administrative		3,156,138			4,775,050
		10,751,320			9,420,610
Interest (income) expense, net		(1,009	)		26,090
Change in fair value of contingent rights		19,891			6,788
Net loss	$	(10,770,202	)	$	(9,453,488	)
Net loss per share (basic and diluted)	$	(0.18	)	$	(0.17	)
Weighted average number of shares outstanding (basic and diluted)		61,513,988			55,869,205

See accompanying notes.

F-4

CASI Pharmaceuticals, Inc.

Consolidated Statements of Stockholders’ Equity

Years Ended December 31, 2017 and 2016

	Preferred Stock			Common Stock				Treasury			Additional Paid-in			Accumulated
	Shares		Amount	Shares		Amount		Stock			Capital			Deficit			Total
Balance at December 31, 2015	-	$	-		32,445,811	$	325,252	$	(8,034,244	)	$	434,099,890		$	(432,478,339	)	$	(6,087,441	)
Issuance of common stock and warrants pursuant to financing agreements	-		-		23,127,566		231,276		-			27,868,724			-			28,100,000
Issuance of common stock from exercise of contingent purchase right	-		-		4,623,197		46,232		-			-			-			46,232
Partial settlement of contingent purchase rights derivative	-		-		-		-		-			5,279,744			-			5,279,744
Stock issuance costs	-		-		-		-		-			(96,512	)		-			(96,512	)
Stock-based compensation expense, net of forfeitures	-		-		-		-		-			2,995,240			-			2,995,240
Net loss	-		-		-		-		-			-			(9,453,488	)		(9,453,488	)
Balance at December 31, 2016	-		-		60,196,574		602,760		(8,034,244	)		470,147,086			(441,931,827	)		20,783,775
Issuance of common stock and warrants pursuant to financing agreements	-		-		7,951,865		79,519		-			23,804,956			-			23,884,475
Issuance of common stock from exercise of contingent purchase right	-		-		1,519,096		15,191		-			-			-			15,191
Issuance of common stock for options exercised	-		-		154,545		1,545		-			324,454			-			325,999
Partial settlement of contingent purchase rights derivative	-		-		-		-		-			4,142,157			-			4,142,157
Stock issuance costs	-		-		-		-		-			(491,721	)		-			(491,721	)
Stock-based compensation expense, net of forfeitures	-		-		-		-		-			650,440			-			650,440
Net loss	-		-		-		-		-			-			(10,770,202	)		(10,770,202	)
Balance at December 31, 2017	-	$	-		69,822,080	$	699,015	$	(8,034,244	)	$	498,577,372		$	(452,702,029	)	$	38,540,114

See accompanying notes.

F-5

CASI Pharmaceuticals, Inc.

Consolidated Statements of Cash Flows

	YEAR ENDED DECEMBER 31,
	2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(10,770,202	)	$	(9,453,488	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		117,779			66,451
Net gain on disposal of assets		-			(12,459	)
Stock-based compensation expense		650,440			2,995,240
Non-cash interest		7,476			26,308
Change in fair value of contingent rights		19,891			6,788
Changes in operating assets and liabilities:
Prepaid expenses and other		(361	)		86,029
Accounts payable		849,365			180,526
Payable to related party		2,228,366			-
Accrued liabilities		495,011			81,486
Net cash used in operating activities		(6,402,235	)		(6,023,119	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment		(934,702	)		(223,233	)
Proceeds from sale of property and equipment		-			158,446
Net cash used in investing activities		(934,702	)		(64,787	)
CASH FLOWS FROM FINANCING ACTIVITIES
Stock issuance costs		(462,841	)		(96,512	)
Proceeds from sale of common stock and warrants		23,870,786			28,146,232
Proceeds from exercise of stock options		325,999			-
Net cash provided by financing activities		23,733,944			28,049,720
Net increase in cash and cash equivalents		16,397,007			21,961,814
Cash and cash equivalents at beginning of year		27,092,928			5,131,114
Cash and cash equivalents at end of year	$	43,489,935		$	27,092,928
Supplemental disclosure of cash flow information:
Non-cash financing activity:
Warrant issued to placement agent	$	28,880		$	-
Partial settlement of contingent rights derivative	$	4,142,157		$	5,279,744
Non-cash investing activity:
Disposal of fully depreciated property and equipment, at cost	$	7,523		$	25,204

See accompanying notes.

F-6

CASI Pharmaceuticals, Inc.

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

CASI Pharmaceuticals, Inc. (“CASI” or the “Company”) is a U.S. based biopharmaceutical company dedicated to bringing high quality, cost-effective pharmaceutical products and innovative oncology therapeutics to patients. The Company intends to execute its plan to become a leading pharmaceutical company with a substantial market share in China. We are headquartered in Rockville, Maryland with established China operations that are expanding as we continue to further in-license or acquire products for our pipeline.

The Company’s pipeline features (1) EVOMELA^®, MARQIBO^®, and ZEVALIN^®, all U.S. Food and Drug Administration (“FDA”) approved drugs in-licensed from Spectrum Pharmaceuticals, Inc. for China regional rights, and currently in various stages in the regulatory process for market approval in China, (2) an acquired portfolio (see Note 12) of 25 FDA-approved abbreviated new drug applications (“ANDAs”), one ANDA that FDA tentatively approved, and three ANDAs that are pending FDA approval, from which the Company intends to prioritize a select subset of product registration and commercialization in China, (3) our proprietary drug candidate, ENMD-2076, currently in Phase 2 clinical development, and (4) CASI-001 and CASI-002, proprietary early-stage candidates in immuno-oncology in preclinical development. The Company’s pipeline reflects a risk-balanced approach between products in various stages of development, and between products that it develops and those that it develops with the Company’s partners for the China regional market. The Company intends to continue building a significant product pipeline of high quality, cost-effective pharmaceuticals, as well as innovative drug candidates that it will commercialize alone in China and with partners for the rest of the world. For in-licensed products, the Company uses a market-oriented approach to identify pharmaceutical candidates that it believes have the potential for gaining widespread market acceptance, either globally or in China, and for which development can be accelerated under the Company’s drug development strategy.

The Company’s focus is to bring high quality, cost-effective pharmaceutical products and innovative oncology therapeutics to patients. The implementation of its plans will include leveraging the Company’s resources in both the United States and China. In order to capitalize on the drug development and capital resources available in China, the Company is doing business in China through its wholly-owned China-based subsidiary that will execute the China portion of the Company’s drug development strategy, including conducting clinical trials in China, pursuing local funding opportunities and strategic collaborations, and implementing the Company’s transition to a commercial enterprise.

In September 2014, the Company acquired from Spectrum Pharmaceuticals, Inc. and certain of its affiliates (together referred to as “Spectrum”) exclusive rights in greater China (including Taiwan, Hong Kong and Macau) to three in-licensed oncology products, including EVOMELA^™ (melphalan hydrochloride for injection) approved in the U.S. primarily for use as a high-dose conditioning treatment prior to hematopoietic progenitor (stem) cell transplantation in patients with multiple myeloma, MARQIBO^® (vinCRIStine sulfate LIPOSOME injection) approved in the U.S. for advanced adult Ph- acute lymphoblastic leukemia (ALL), and ZEVALIN^® (ibritumomab tiuxetan) approved in the U.S. for advanced non-Hodgkin’s lymphoma.

On January 26, 2018, the Company acquired a portfolio of 25 U.S. FDA-approved abbreviated new drug applications (ANDAs), one ANDA that FDA tentatively approved, and three ANDAs that are pending FDA approval. CASI intends to select and commercialize certain products from the portfolio that offer unique market and cost-effective manufacturing opportunities in China and/or in the U.S.

F-7

The Company’s primary focus is to acquire high quality, cost-effective medicines, as well as to in-license clinical-stage and late-stage drug candidates so that it can immediately employ its U.S. and China drug development model to accelerate commercialization, and clinical and regulatory progress. In addition to its high quality, cost-effective medicines, and clinical-and late-stage approach for innovative products, the Company has other potential drug candidates in preclinical development which it will continue to evaluate in 2018.

The accompanying consolidated financial statements include the accounts of CASI Pharmaceuticals, Inc. and its subsidiaries, Miikana Therapeutics, Inc. (“Miikana”) and CASI Pharmaceuticals (Beijing) Co., Ltd. (“CASI China”). CASI China is a non-stock Chinese entity with 100% of its interest owned by CASI. CASI China received approval for a business license from the Beijing Industry and Commercial Administration in August 2012 and has operating facilities in Beijing. All inter-company balances and transactions have been eliminated in consolidation.

LIQUIDITY RISKS AND MANAGEMENT’S PLANS

Since inception, the Company has incurred significant losses from operations and has incurred an accumulated deficit of $452.7 million.   The Company restructured its business in 2012 in connection with an investment led by one of the Company’s largest stockholders, followed by implementation of a name change to reflect its core mission and business strategy. The Company expects to continue to incur operating losses for the foreseeable future due to, among other factors, its continuing clinical activities. In March 2018, the Company entered into securities purchase agreements pursuant to which the Company is issuing 15,432,091 shares of its common stock with accompanying warrants to purchase 6,172,832 shares of its common stock in a $50 million private placement (the “2018 Strategic Financing”) (see Note 8). To date, the Company has received gross proceeds of $29.3 million and expects to receive additional gross proceeds of $20.7 million in the near future. The 2018 Strategic Financing Closing included an investment from ETP Global Fund, L.P., a healthcare investment fund. The managing member of Emerging Technology Partners, LLC, which is the general partner of ETP Global Fund, L.P., is also the Executive Chairman of the Company. The 2018 Strategic Financing also included an investment from IDG-Accel China Growth Fund III L.P. (“IDG-Accel Growth”) and IDG-Accel China III Investors L.P. (“IDG-Accel Investors”). A director and shareholder of IDG-Accel China Growth Fund GP III Associates Ltd., which is the ultimate general partner of IDG-Accel Growth and IDG-Accel Investors, is also a board member of the Company. In October 2017, the Company entered into securities purchase agreements for an approximately $23.8 million strategic financing. The Company held its initial closing on October 17, 2017, a second closing on October 23, 2017 and a final closing on November 20, 2017 and received approximately $23.4 million in net proceeds, (collectively, the “2017 Closings”) (see Note 8). Net proceeds from the 2018 Strategic Financing and 2017 Closings are being used to prepare for the anticipated launch of the Company’s first commercial product in China, support the Company’s business development activities, advance the development of the Company’s pipeline, support its marketing and commercial planning activities, and for other general corporate purposes.

As a result of the 2018 Strategic Financing and 2017 Closings the Company believes that it has sufficient resources to fund its operations at least through March 29, 2019. As of December 31, 2017, approximately $12.2 million of the Company’s cash balance was held by CASI China. The Company intends to continue to exercise tight controls over operating expenditures and will continue to pursue opportunities, as required, to raise additional capital and will also actively pursue non- or less-dilutive capital raising arrangements in China to support the Company’s dual-country approach to drug development.

In order to capitalize on the drug development and capital resources available in China, the Company is doing business in China through its wholly-owned China-based subsidiary that will execute the China portion of the Company’s drug development strategy, including commercialization and conducting clinical trials in China, pursuing local funding opportunities and strategic collaborations, and implementing the Company’s plan for development and commercialization in the Chinese market.

The Company intends to pursue additional financing opportunities as well as opportunities to raise capital through forms of non- or less- dilutive arrangements, such as partnerships and collaborations with organizations that have capabilities and/or products that are complementary to the Company’s capabilities and products in order to continue the development of the product candidates that the Company intends to pursue to commercialization.

F-8

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SEGMENT INFORMATION

The Company currently operates in one business segment, which is the development of innovative therapeutics addressing cancer and other unmet medical needs for the global market. The Company is managed and operated as one business. CASI’s senior management team reports to the Board of Directors and is responsible for aligning the Company’s business strategy with its core scientific strengths, while maintaining prudent resource management, fiscal responsibility and accountability. The Company employs a drug development strategy in the United States and China to develop targeted therapeutics for the global market that are potential first-in-class or market-leading compounds for treatment of cancer.

The Company does not operate separate lines of business with respect to its product candidates. Accordingly, the Company does not have separately reportable segments as defined by authoritative guidance issued by the Financial Accounting Standards Board (FASB).

RESEARCH AND DEVELOPMENT

Research and development expenses consist primarily of compensation and other expenses related to research and development personnel, research collaborations, costs associated with pre-clinical correlative testing and clinical trials of the Company’s drug candidates, including the costs of manufacturing drug substance and drug product, regulatory maintenance costs, and facilities expenses. Research and development costs are expensed as incurred.

PROPERTY AND EQUIPMENT

Furniture and equipment and leasehold improvements are stated at cost and are depreciated or amortized over their estimated useful lives of 3 to 5 years. Depreciation and amortization is determined on a straight-line basis. Depreciation and amortization expense was $117,779 and $66,451 in 2017 and 2016, respectively.

Property and equipment consists of the following:

	DECEMBER 31,
	2017			2016
Furniture and equipment	$	1,150,052		$	480,172
Leasehold improvements		268,734			11,435
		1,418,786			491,607
Less:  accumulated depreciation and amortization		(372,272	)		(262,016	)
	$	1,046,514		$	229,591

IMPAIRMENT OF LONG-LIVED ASSETS

In accordance with authoritative guidance issued by the FASB, the Company periodically evaluates the value reflected in its consolidated balance sheets of long-lived assets, such as equipment, when events and circumstances indicate that the carrying amount of an asset may not be recovered. Such events and circumstances include the use of the asset in current research and development projects, any potential alternative uses of the asset in other research and development projects in the short to medium term and restructuring plans entered into by the Company. No impairment charges were recorded in 2017 and 2016.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash and highly liquid investments with original maturities of less than 90 days. Substantially all of the Company’s cash equivalents are held in short-term money market accounts.

F-9

FOREIGN CURRENCY TRANSLATION

The U.S. dollar is the functional and reporting currency of the Company. Foreign currency denominated assets and liabilities of the Company and all of its subsidiaries are translated into U.S. dollars. Accordingly, monetary assets and liabilities are translated using the exchange rates in effect at the consolidated balance sheet date and revenues and expenses at the rates of exchange prevailing when the transactions occurred. Remeasurement adjustments are included in income (loss). As discussed in Note 12, on January 26, 2018 the Company acquired a portfolio of ANDAs.  Management believes that this transaction provides significant and permanent changes to its operations in China, allowing its subsidiary in China to generate operating revenues from the China marketplace in the future and potentially to sustain their own operations without the necessity of parent support.  Accordingly, effective January 1, 2018, the functional currency of the Company’s subsidiary based in China has been changed to the local currency of the China Renminbi (“RMB”).

EXPENSES FOR CLINICAL TRIALS

Expenses for clinical trials are incurred from planning through patient enrollment to reporting of the data. The Company estimates expenses incurred for clinical trials that are in process based on patient enrollment and based on clinical data collection and management. Costs that are associated with patient enrollment are recognized as each patient in the clinical trial completes the enrollment process. Estimated clinical trial costs related to enrollment can vary based on numerous factors, including expected number of patients in trials, the number of patients that do not complete participation in a trial, and the length of participation for each patient. Costs that are based on clinical data collection and management are recognized in the reporting period in which services are provided. In the event of early termination of a clinical trial, the Company accrues an amount based on estimates of the remaining non-cancelable obligations associated with winding down the clinical trial. As of December 31, 2017 and 2016, clinical trial accruals were $402,773 and $499,028, respectively, and are included in accounts payable in the accompanying consolidated balance sheets.

INCOME TAXES

Income tax expense is accounted for in accordance with authoritative guidance issued by the FASB. Income tax expense has been provided using the asset and liability method. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities as measured by the enacted tax rates that will be in effect when these differences reverse. The Company provides a valuation allowance against net deferred tax assets if, based upon the available evidence, it is not more likely than not that the deferred tax assets will be realized.

The Company accounts for uncertain tax positions pursuant to the guidance of FASB Accounting Standards Codification Topic 740, Income Taxes. The Company recognizes interest and penalties related to uncertain tax positions, if any, in income tax expense. As of December 31, 2017 and 2016, the Company did not accrue any interest related to uncertain tax positions. To date, there have been no interest or penalties charged to the Company in relation to the underpayment of income taxes.

REVENUE RECOGNITION

Revenue for product sales is not recognized until it is realized or realizable and earned. Revenue is recognized when all of the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price to the buyer is fixed and determinable and collectibility is reasonably assured.

NET LOSS PER SHARE

Net loss per share (basic and diluted) was computed by dividing net loss attributable to common shareholders by the weighted average number of shares of common stock outstanding. Outstanding options and warrants totaling 17,849,331 and 15,923,807 as of December 31, 2017 and 2016, respectively, were anti-dilutive and, therefore, were not included in the computation of weighted average shares used in computing diluted loss per share.

F-10

SHARE-BASED COMPENSATION

The Company records compensation expense associated with service and performance based stock options and other equity-based compensation in accordance with provisions of authoritative guidance. The fair value of awards whose fair values are calculated using the Black-Scholes option pricing model is generally being amortized on a straight-line basis over the requisite service period and is recognized based on the proportionate amount of the requisite service period that has been rendered during each reporting period. Share-based awards granted to employees with a performance condition are measured based on the probable outcome of that performance condition during the requisite service period. Awards with performance conditions will be expensed if it is probable that the performance condition will be achieved. During the years ended December 31, 2017 and 2016, $30,500 and $10,100, respectively, of stock compensation expense was recorded for share awards with performance conditions.

NEW ACCOUNTING PRONOUNCEMENTS

The Company has implemented all new accounting pronouncements that are in effect and that may impact the Company’s consolidated financial statements.

In January 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-01, Financial Instruments–Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. The accounting standard primarily affects the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments.  In addition, it includes a clarification related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The accounting guidance is effective for annual reporting periods (including interim periods within those periods) beginning after December 15, 2017. The Company intends to adopt ASU 2016-01 in the first quarter of 2018 and does not expect that the adoption of this ASU will have a material effect on the consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 supersedes existing lease guidance, including Accounting Standards Codification (ASC) 840 - Leases. Among other things, the new standard requires recognition of a right-of-use asset and liability for future lease payments for contracts that meet the definition of a lease. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Earlier application is permitted. The standard must be applied using a modified retrospective approach. The Company is currently evaluating the effect that the adoption of this ASU will have on its consolidated financial statements.

In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718) Scope of Modification Accounting. ASU 2017-09 provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. This ASU does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions, or award classification and would not be required if the changes are considered non-substantive. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company intends to adopt ASU 2017-09 in the first quarter of 2018 and does not expect that the adoption of this ASU will have a material effect on the consolidated financial statements.

There are no other recently issued accounting pronouncements that are expected to have a material effect on the Company’s financial position, results of operations or cash flows.

FAIR VALUE OF FINANCIAL INSTRUMENTS AND CONCENTRATIONS OF CREDIT RISK

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company maintains its cash in bank deposit accounts, which, at times, may exceed federally insured amounts. The Company believes it is not exposed to significant credit risk on cash and cash equivalents. The carrying amount of current assets and liabilities approximates their fair values due to their short-term maturities.

F-11

USE OF ESTIMATES

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company’s most critical accounting estimates relate to accounting policies for derivatives, notes payable valuation, 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 may differ from those estimates, and such differences may be material to the consolidated financial statements.

DERIVATIVES

The Company entered into investment agreements with Spectrum (see Note 4) resulting in a purchase price derivative. In accordance with GAAP, derivative instruments are recognized as either assets or liabilities on the consolidated balance sheets and are measured at fair value with gains or losses recognized in earnings or other comprehensive income depending on the nature of the derivative. The Company determines the fair value of derivative instruments based on available market data using appropriate valuation models, giving consideration to all of the rights and obligations of each instrument.  The derivative liability is re-measured at fair value at the end of each reporting period as long as it is outstanding. As of December 31, 2017, the derivative liability has been settled and is no longer outstanding.

3. RELATED PARTY TRANSACTIONS

In April, June 2017, and November 2017, under supply agreements with Spectrum, the Company received shipments of EVOMELA^®, MARQIBO^®, and ZEVALIN^® respectively, in China for quality testing purposes to support CASI’s application for import drug registration. In 2016, the Company also received shipments of MARQIBO^® in China for quality testing purposes to support CASI’s application for import drug registration. The former CEO of Spectrum and current board member of Spectrum is also a board member of CASI. The total cost of the materials was approximately $2,705,000 and $155,220 in 2017 and 2016, respectively, which is included in research and development expense for the respective years. As of December 31, 2017, the amount payable to Spectrum totaling $2,228,366 is reflected as a related party payable in the accompanying consolidated balance sheet.

4. LICENSE ARRANGEMENTS

The Company has certain product rights and perpetual exclusive licenses from Spectrum Pharmaceuticals, Inc. and certain of its affiliates (together referred to as “Spectrum”) to develop and commercialize the following commercial oncology drugs and drug candidates in the greater China region (which includes China, Taiwan, Hong Kong and Macau) (the “Territories”):

· EVOMELA^® (melphalan) for Injection (“Evomela”);

· MARQIBO^® (vinCRIStine sulfate LIPOSOME injection) (“Marqibo”); and

· ZEVALIN^® (ibritumomab tiuxetan) (“Zevalin”).

CASI is responsible for developing and commercializing these three drugs in the Territories, including the submission of import drug registration applications and conducting confirmatory clinical trials as needed.

The Company is in various stages of the regulatory and development process to obtain marketing approval for EVOMELA^®, MARQIBO^®, and ZEVALIN^® in its territorial region, with ZEVALIN^® commercially available in Hong Kong. In January 2016, the China Food and Drug Administration (CFDA) accepted for review the Company’s import drug registration application for MARQIBO^® and currently is in the quality testing phase of the regulatory process. On March 10, 2016, Spectrum received notification from the U.S. Food and Drug Administration (FDA) of the grant of approval of its New Drug Application (NDA) for EVOMELA^® primarily for use as a high-dose conditioning treatment prior to hematopoietic progenitor (stem) cell transplantation in patients with multiple myeloma. In December 2016, the CFDA accepted for review the Company’s import drug registration application for EVOMELA^® and in 2017 has granted priority review of the import drug registration clinical trial application (CTA), which has completed the quality testing phase of the regulatory process and is currently in technical review by Center for Drug Evaluation (CDE) of the CFDA as part of the regulatory process. In 2017, the CFDA accepted for review the Company’s import drug registration for ZEVALIN^® including both the antibody kit and the radioactive Yttrium-90 component.

F-12

As consideration for the acquisition from Spectrum, the Company issued a total 5,405,382 shares of its common stock, a $1.5 million 0.5% secured promissory note originally due in March 2016, and certain contingent rights (“Contingent Rights”) to purchase additional shares of its common stock, which Contingent Rights expire upon the occurrence of certain events. The note has been subsequently amended to extend the due date to September 17, 2019 (see Note 5). The Company accounted for the acquisition of the product rights and licenses as an asset acquisition and, accordingly, recorded the acquired product rights and licenses at their estimated fair values based on the fair value of the consideration exchanged (including transaction costs) of approximately $19.7 million.

The fair value of the common stock issued was based on the closing market price of the Company’s common stock on the acquisition date. The fair value of the promissory note was measured using Level 3 unobservable inputs (see Note 6) including primarily the Company’s estimated incremental borrowing rate as provided by a commercial lending institution.

The Contingent Rights provide Spectrum with the option to acquire, at a strike price of par value, a variable number of additional shares of common stock that allows Spectrum to maintain its fully-diluted ownership percentage for a certain time period and under certain terms and conditions. These Contingent Rights will expire on the earlier of raising an aggregate of $50 million or September 17, 2019 (subject to possible extension only for certain outstanding derivative securities). Based on the terms and conditions of the Contingent Rights, the Company has determined that the Contingent Rights are a derivative financial instrument that is not indexed to its common stock and therefore is required to be accounted for at fair value, initially and on a recurring basis. The fair value of the Contingent Rights was measured using Level 3 unobservable inputs; the unobservable inputs include estimates of the Company’s future capital requirements, and the timing, probability, size and characteristics of those capital raises, among other inputs. The total estimated fair value of the Contingent Rights was $0 and $4,122,266 as of December 31, 2017 and 2016, respectively; the change in fair value (see Note 6) is reflected as change in fair value of contingent rights in the accompanying consolidated statements of operations.

As a result of the 2017 Closings that occurred during 2017 (see Note 8), Spectrum exercised its Contingent Rights and the Company issued Spectrum 1,519,096 shares of common stock during 2017. This exercise resulted in the full settlement of the contingent rights derivative liability reducing the value to $0 as of December 31, 2017. The Company recorded a reduction to the contingent rights derivative liability and an increase to additional paid-in capital of $4,142,157 in 2017 related to the partial settlement of the contingent rights derivative as a result of the 2017 Closings, which is reflected in the accompanying consolidated balance sheet as of December 31, 2017. As a result of the 2016 Closings and the October 2016 Offering that occurred during 2016 (see Note 8), Spectrum exercised its Contingent Rights and the Company issued 4,623,197 shares of common stock during 2016. The Company recorded a reduction to the contingent rights derivative liability and an increase to additional paid-in capital of $5,279,744 in 2016 related to the partial settlement of the contingent rights derivative as a result of the 2016 Closings and the October 2016 Offering, which is reflected in the accompanying consolidated balance sheet as of December 31, 2016.

5. NOTE PAYABLE

As part of the license arrangements with Spectrum (see Note 4), the Company issued to Spectrum a $1.5 million 0.5% secured promissory note originally due March 17, 2016. The promissory note was recorded initially at its fair value, giving rise to a discount of approximately $136,000; the promissory note is presented as note payable, net of discount in the accompanying consolidated balance sheets. For the years ended December 31, 2017 and 2016, the Company recognized approximately $7,000 and $26,000 of non-cash interest expense, respectively, related to the amortization of the debt discount, using the effective interest rate method. On September 28, 2015, the Company entered into a First Amendment to Secured Promissory Note (the “Amendment”) with Spectrum. Pursuant to the Amendment, the Company and Spectrum agreed to extend the maturity date of the note to March 17, 2017. On December 13, 2016, the Company entered into a Second Amendment to Secured Promissory Note (the “Second Amendment”) with Spectrum to extend the maturity date of the Note to March 17, 2018. On December 20, 2017, the Company entered into a Third Amendment to Secured Promissory Note (the “Third Amendment”) with Spectrum to extend the maturity date of the Note to September 17, 2019. All other terms remain the same.

F-13

6.  FAIR VALUE MEASUREMENTS

Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. U.S. GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of observability of inputs used in measuring fair value. These tiers include:

· Level 1, defined as observable inputs such as quoted prices in active markets for identical assets;

· Level 2, defined as observable inputs other than Level 1 prices such as quoted prices for similar assets; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

· Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

An asset’s or liability’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. At each reporting period, the Company performs a detailed analysis of its assets and liabilities that are measured at fair value. All assets and liabilities for which the fair value measurement is based on significant unobservable inputs or instruments which trade infrequently and therefore have little or no price transparency are classified as Level 3.

The inputs used in measuring the fair value of cash and cash equivalents are considered to be Level 1 in accordance with the three-tier fair value hierarchy. The fair market values are based on period-end statements supplied by the various banks and brokers that held the majority of the Company’s funds. The fair value of short-term financial instruments (primarily accounts receivable, prepaid expenses, accounts payable, accrued expenses, and other current assets and liabilities) approximates their carrying values because of their short-term nature.

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis:

The Contingent Rights issued to Spectrum in connection with the license arrangements (see Note 4) were considered derivative liabilities and were recorded initially at their estimated fair value, and are marked to market each reporting period until settlement. The fair value of the Contingent Rights was measured using Level 3 unobservable inputs; the unobservable inputs include estimates of the Company’s future capital requirements, and the timing, probability, size and characteristics of those capital raises, among other inputs. Generally, if the estimates of the size and probability of the Company’s future capital requirements increase, the fair value of the Contingent Rights will also increase.

The following table presents the Company’s financial liabilities accounted for at fair value on a recurring basis as of December 31, 2016 by level within the fair value hierarchy. The Contingent Rights were fully settled during 2017 resulting in a $0 fair value as of December 31, 2017.

	As of December 31, 2016
	Level 1		Level 2		Level 3		Total
Liabilities - Contingent Rights	$	-	$	-	$	4,122,266	$	4,122,266

The following table presents the changes in the Company’s financial liabilities accounted for at fair value on a recurring basis using Level 3 unobservable inputs:

	2017			2016
Balance at beginning of year	$	4,122,266		$	9,395,222
Partial settlement of Contingent Rights		(4,142,157	)		(5,279,744	)
Change in fair value of Contingent Rights		19,891			6,788
Balance at end of year	$	-		$	4,122,266

F-14

Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis:

The promissory note issued to Spectrum in connection with the license arrangements (see Note 4) was initially recorded at its fair value using Level 3 unobservable inputs including primarily the Company’s estimated incremental borrowing rate as provided by a commercial lending institution.

Non-Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis:

The Company does not have any non-financial assets and liabilities that are measured at fair value on a recurring basis.

Non-Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis:

The Company measures its long-lived assets, including property and equipment, at fair value on a non-recurring basis. These assets are recognized at fair value when they are deemed to be impaired. No such fair value impairment was recognized for the years ended December 31, 2017 and 2016.

7. INCOME TAXES

The income tax provision is based on loss before income taxes of $(8,658,120) in the U.S. and $(2,112,082) in China. The Company has net operating loss (NOL) carryforwards for income tax purposes of approximately $368,134,000 at December 31, 2017 that expire in years 2018 through 2038. The Company also has research and development (“R&D”) tax credit carryforwards of approximately $9,593,000 as of December 31, 2017 that expire in years 2018 through 2038. Under the provisions of the Internal Revenue Code, the NOL and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. NOL and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50%, as defined under Sections 382 and 383 of the Internal Revenue Code of 1986, respectively, as well as similar state tax provisions. This could limit the amount of tax attributes that the Company can utilize annually to offset future taxable income or tax liabilities. The amount of the annual limitation, if any, will be determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. For financial reporting purposes, a valuation allowance has been recognized to reduce the net deferred tax assets to zero due to uncertainties with respect to the Company’s ability to generate taxable income in the future sufficient to realize the benefit of deferred income tax assets.

For financial reporting purposes, loss before taxes includes the following components:

	2017			2016
United States	$	(8,658,120	)	$	(7,375,974	)
Foreign		(2,112,082	)		(2,077,514	)
Total	$	(10,770,202	)	$	(9,453,488	)

Deferred income taxes reflect the net effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred income tax assets and liabilities as of December 31, 2017 and 2016 are as follows:

	DECEMBER 31,
	2017			2016
Deferred income tax assets:
Net operating loss carryforwards	$	96,786,000		$	140,468,000
Research and development credit carryforward		9,592,000			9,399,000
Intangible assets		4,184,000			6,913,000
Equity-based compensation		3,812,000			5,578,000
Other		164,000			297,000
Valuation allowance for deferred income tax assets		(114,538,000	)		(162,655,000	)
Net deferred income tax assets	$	-		$	-

F-15

On December 22, 2017, H.R.1, known as the “Tax Act,” was signed into law and makes broad and complex changes to the U.S. tax code, including, but not limited to, (1) reducing the U.S. federal corporate tax rate to a flat rate of 21% for periods after December 31, 2017 and (2) requiring a one-time transition tax on certain un-repatriated earnings of foreign subsidiaries that is payable over eight years. As a result of the reduction of the corporate tax rate to 21%, U.S. generally accepted accounting principles require companies to re-value their deferred tax assets and liabilities as of the date of enactment, with resulting tax effects accounted for in the reporting period of enactment. As a result of this revaluation, the Company has reduced its pre-valuation allowance deferred tax asset by $52,258,000 in the year ended December 31, 2017, with a corresponding decrease in the valuation allowance on its net deferred tax assets. The Company has no unrepatriated earnings in any of its foreign subsidiaries as they incurred losses since inception.

A reconciliation of the provision for income taxes to the federal statutory rate is as follows:

	2017			2016
Tax benefit at statutory rate	$	(3,662,000	)	$	(3,214,000	)
Effect of tax law change		52,258,000			-
State taxes		(290,000	)		(232,000	)
Net R&D credit adjustment		(185,000	)		(105,000	)
Attribute expiration		50,000			-
Nondeductible expenses		6,000			4,000
Change in valuation allowance		(48,117,000	)		3,461,000
Other		125,000			177,000
Changes in applicable tax rates		(185,000	)		(91,000	)
	$	-		$	-

The Company had $3,133,000 of unrecognized tax benefits as of December 31, 2016 related to net R&D tax credit carryforwards. The Company had a full valuation allowance on the net deferred tax asset recognized in the consolidated financial statements. For the year ended December 31, 2017, there were net additional unrecognized tax benefits of $65,000 related to R&D tax credits. The Company has a full valuation allowance at December 31, 2017 and 2016 against the full amount of its net deferred tax assets and, therefore, there was no impact on the Company’s financial position.

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:

	2017		2016
Unrecognized tax benefits balance at January 1	$	3,133,000	$	3,097,000
Additions for Tax Positions of Prior Periods		3,000		1,000
Additions for Tax Positions of Current Period		62,000		35,000
Unrecognized tax benefits balance at December 31	$	3,198,000	$	3,133,000

The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense. As of December 31, 2017 and 2016, the Company had no accrued interest or penalties related to uncertain tax positions.

The tax returns for all years in the Company’s major tax jurisdictions are not settled as of December 31, 2017. Due to the existence of tax attribute carryforwards (which are currently offset by a full valuation allowance), the Company treats all years’ tax positions as unsettled due to the taxing authorities’ ability to modify these attributes.

The Company believes that the total unrecognized tax benefit, if recognized, would impact the effective rate, however, such reversal may be offset by a corresponding adjustment to the valuation allowance.

8. STOCKHOLDERS’ EQUITY

SECURITIES PURCHASE AGREEMENTS

As described in Note 1, on March 19, 2018, the Company entered into securities purchase agreements (the “Securities Purchase Agreements”) with certain institutional investors, accredited investors and current stockholders, pursuant to which the Company is issuing 15,432,091 shares of its common stock with accompanying warrants to purchase 6,172,832 shares of its common stock in a $50 million private placement. To date, the Company has received gross proceeds of $29.3 million and expects to receive additional gross proceeds of $20.7 million in the near future. The purchase price for each share of common stock and warrant was $3.24. The warrants will become exercisable 180 days after issuance at a $3.69 per share exercise price, and will expire five years from the date of issuance. The Securities Purchase Agreements and warrants each include additional customary representations, warranties and covenants. The Company also agreed to file a resale registration within 120 days following the closing covering the shares of common stock issued and the shares of common stock underlying the warrants.

F-16

As described in Note 1, on October 13, 2017, the Company entered into securities purchase agreements with certain institutional investors, accredited investors and current stockholders pursuant to which the Company agreed to sell 7,951,865 shares of its common stock and warrants exercisable for up to 1,590,373 shares of its common stock (exclusive of the Agent Warrants described below) in a registered direct offering (the “2017 Offering”) for gross proceeds of $23,855,595. As a result of the 2017 Closings related to the Offering, the Company received approximately $23.4 million after offering expenses and issued 7,951,865 shares of common stock. The shares and warrants were sold together, consisting of one share of common stock and a warrant to purchase 0.20 shares of common stock for each share of common stock purchased, at a combined offering price of $3.00. The warrants are exercisable beginning on April 17, 2018 and expire on April 17, 2020. The warrants have an exercise price of $3.75 per share. The fair value of the warrants issued is $1,558,566, calculated using the Black-Scholes-Merton valuation model value of $0.98 with a contractual life of 2.5 years, an assumed volatility of 85.4%, and a risk-free interest rate of 1.54%.

In connection with the 2017 Offering, the Company issued to its placement agent or its designees warrants to purchase 48,133 shares of common stock at an exercise price of $3.75 per share of common stock (the “Agent Warrants”), representing the number of warrants equal to an aggregate of 4% of the number of shares sold to investors placed by the placement agent in the 2017 Offering, excluding investments made by certain China-focused investors that were placed by the Company. The Agent Warrants are exercisable beginning on April 17, 2018 and expire on April 17, 2019. The fair value of the warrants issued is $28,880, calculated using the Black-Scholes-Merton valuation model value of $0.60 with a contractual life of 1.5 years, an assumed volatility of 77.8%, and a risk-free interest rate of 1.54%.

On September 20, 2015, the Company entered into stock purchase agreements with certain institutional and accredited investors for a $25.1 million financing. Pursuant to these agreements, the Company agreed to sell to the investors in a private placement an aggregate of 20,658,434 shares of the Company’s common stock, at $1.19 per share, based on the closing bid price of the Company’s common stock on the Nasdaq Capital Market on September 18, 2015, and a total of 4,131,686 warrants, representing a 20% warrant coverage, with a purchase price of $0.125 per whole warrant share. The warrants became exercisable three months after issuance at $1.69 per share exercise price, and expire three years from the date the warrants become exercisable. The offering closed after satisfaction of certain regulatory and customary closing conditions, with the net proceeds subject to payment of offering expenses, including fees and expenses.

On January 15, 2016, the Company completed the first closing and received approximately $10.3 million and yielded approximately $10.2 million after offering expenses (the “First Closing”). The First Closing resulted in the issuance of 8,448,613 shares of Common Stock, priced at $1.19 per share, and 1,689,722 warrants, with a purchase price of $0.125 per warrant. The warrants became exercisable on April 15, 2016 at $1.69 per share exercise price, and will expire on April 15, 2019. The fair value of the warrants issued is $321,047, calculated using the Black-Scholes-Merton valuation model value of $0.19 with a contractual life of 3.25 years, an assumed volatility of 70.1%, and a risk-free interest rate of 1.08%.

On June 24, 2016, the Company completed the second closing and received approximately $6.0 million (the “Second Closing”). The Second Closing resulted in the issuance of 4,906,118 shares of Common Stock, priced at $1.19 per share, and 981,223 warrants, with a purchase price of $0.125 per warrant. The warrants became exercisable on September 23, 2016 at $1.69 per share exercise price, and will expire on September 23, 2019. The fair value of the warrants issued is $431,738, calculated using the Black-Scholes-Merton valuation model value of $0.44 with a contractual life of 3.25 years, an assumed volatility of 70.4%, and a risk-free interest rate of 0.76%.

On July 5, 2016, the Company completed the third closing and received $1.0 million (the “Third Closing”). The Third Closing resulted in the issuance of 823,045 shares of Common Stock, priced at $1.19 per share, and 164,609 warrants, with a purchase price of $0.125 per warrant. The warrants became exercisable on October 4, 2016 at $1.69 per share exercise price, and will expire on October 4, 2019. The fair value of the warrants issued is $67,490, calculated using the Black-Scholes-Merton valuation model value of $0.41 with a contractual life of 3.25 years, an assumed volatility of 70.6%, and a risk-free interest rate of 0.66%.

F-17

On October 3, 2016, the Company completed the final closing and received $7.8 million (the “Final Closing”). The Final Closing resulted in the issuance of 6,480,655 shares of Common Stock, priced at $1.19 per share, and 1,296,129 warrants, with a purchase price of $0.125 per warrant. The warrants became exercisable on January 2, 2017 at $1.69 per share exercise price, and will expire on January 2, 2020. The fair value of the warrants issued is $544,374, calculated using the Black-Scholes-Merton valuation model value of $0.42 with a contractual life of 3.25 years, an assumed volatility of 71.4%, and a risk-free interest rate of 0.91%. The Final Closing included an investment from ETP Global Fund, L.P., a healthcare investment fund. The managing member of Emerging Technology Partners, LLC, which is the general partner of ETP Global Fund, L.P., is also the Executive Chairman of the Company.

On October 24, 2016, the Company entered into and closed on a stock purchase agreement with an accredited investor, pursuant to which the Company agreed to sell to the investor in a private placement an aggregate of 2,469,135 shares of the Company’s Common Stock, priced at $1.190 per share, and 493,827 warrants, representing a 20% warrant coverage, with a purchase price of $0.125 per whole warrant share, for aggregate gross proceeds to the Company of $3.0 million (the “October 2016 Offering”). The warrants became exercisable on January 23, 2017 at $1.69 per share exercise price, and will expire on January 23, 2020. The fair value of the warrants issued in the October 2016 Offering is $306,173, calculated using the Black-Scholes-Merton valuation model value of $0.62 with a contractual life of 3.25 years, an assumed volatility of 72.2%, and a risk-free interest rate of 1.00%.

The Company granted registration rights to all of the investors and filed a resale registration statement covering the shares of common stock and the shares of common stock underlying the warrants on December 2, 2016. The registration statement was declared effective by the SEC on December 21, 2016.

COMMON STOCK SALES AGREEMENT

On February 23, 2018, the Company entered into a Common Stock Sales Agreement (the “Sales Agreement”) with H.C. Wainwright & Co., LLC (“HCW”). Pursuant to the terms of the Sales Agreement, the Company may sell from time to time, at its option, shares of the Company’s common stock through HCW, as sales agent, with an aggregate sales price of up to $25 million (the “Shares”).

Any sales of Shares pursuant to the Sales Agreement will be made under the Company’s effective “shelf” registration statement (the “Registration Statement”) on Form S-3 (File No. 333-222046) which became effective on December 22, 2017 and the related prospectus supplement and the accompanying prospectus, as filed with the Securities and Exchange Commission (the “SEC”) on February 23, 2018.

Under the terms of the Sales Agreement, the Company may sell shares of its common stock through HCW by any method permitted that is deemed an “at the market offering” as defined in Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”). HCW will use its commercially reasonable efforts consistent with its normal trading and sales practices to sell the Company’s common stock from time to time, based upon the Company’s instructions (including any price, time or size limits or other customary parameters or conditions the Company may impose). Actual sales will depend on a variety of factors to be determined by the Company from time to time, including (among others) market conditions, the trading price of the Company’s common stock, capital needs and determinations by the Company of the appropriate sources of funding for the Company. The Company is not obligated to make any sales of common stock under the Sales Agreement and the Company cannot provide any assurances that it will issue any shares pursuant to the Sales Agreement. The Company will pay a commission rate of up to 3.0% of the gross sales price per share sold and agreed to reimburse HCW for certain specified expenses. The Company has also agreed pursuant to the Sales Agreement to provide HCW with customary indemnification and contribution rights.

The Company or HCW upon notice to the other, may suspend the offering of the Shares under the Sales Agreement at any time. The offering of the Shares pursuant to the Sales Agreement will terminate upon the sale of Shares in an aggregate offering amount equal to $25 million, or sooner if either the Company or HCW terminate the Sales Agreement pursuant to its terms.

F-18

Through March 2018, the Company issued 143,248 Shares under the Sales Agreement resulting in net proceeds to the Company of approximately $475,000.

9. SHARE-BASED COMPENSATION AND WARRANTS

The Company has adopted incentive and nonqualified stock option plans for executive, scientific and administrative personnel of the Company as well as outside directors and consultants. In June 2017, the Company’s shareholders approved an amendment to the 2011 Long-Term Incentive Plan, increasing the number of shares reserved for issuance from 11,230,000 to 14,230,000 shares of common stock to be available for grants and awards. As of December 31, 2017, there are 11,585,315 shares issuable under options previously granted and currently outstanding, with exercise prices ranging from $0.86 to $7.37. In 2017, the Company awarded options to employees, covering up to 2,225,000 shares, in which vesting is subject to achievement of certain performance milestones. Options granted under the plans generally vest over periods varying from immediately to one to three years, are not transferable and generally expire ten years from the date of grant. As of December 31, 2017, 2,852,234 shares remained available for grant under the Company’s 2011 Long-Term Incentive Plan. On March 13, 2018, upon the recommendation of the Compensation Committee of the Board of Directors (the “Board”), the Board approved a grant of stock options to the Company’s Executive Chairman exercisable for 1 million shares of common stock that will vest and become exercisable on the first anniversary date of the grant. In addition, the Board approved the grant of a performance-based option covering 4 million shares of common stock that will vest if, within 18 months of the date of grant, specific operational and strategic milestones are achieved. Both grants are conditioned upon stockholder approval at the 2018 Annual Meeting of Stockholders.

The Company records compensation expense associated with stock options and other equity-based compensation in accordance with provisions of authoritative guidance. Compensation costs are recognized over the requisite service period, which is generally the option vesting term of up to three years. Awards with performance conditions will be expensed if it is probable that the performance condition will be achieved. For the years ended December 31, 2017 and 2016, $30,500 and $10,100, respectively was expensed for share awards with performance conditions that became probable during that period.

The Company’s net loss for the years ended December 31, 2017 and 2016 includes $650,440 and $2,995,240, respectively, of non-cash compensation expense related to the Company’s share-based compensation awards. The compensation expense related to the Company’s share-based compensation arrangements is recorded as components of general and administrative expense and research and development expense, as follows:

	2017		2016
Research and development	$	271,733	$	746,027
General and administrative		378,707		2,249,213
Share-based compensation expense	$	650,440	$	2,995,240
Net share-based compensation expense, per common share:
Basic and diluted	$	0.01	$	0.05

Stock Options

The Company uses the Black-Scholes-Merton valuation model to estimate the fair value of service based and performance based stock options granted to employees. Option valuation models, including Black-Scholes-Merton, require the input of highly subjective assumptions, and changes in the assumptions used can materially affect the grant date fair value of an award. These assumptions include the risk free rate of interest, expected dividend yield, expected volatility, and the expected life of the award.

Expected Volatility—Volatility is a measure of the amount by which a financial variable such as a share price has fluctuated (historical volatility) or is expected to fluctuate (expected volatility) during a period. The Company uses the historical volatility based on the daily price observations of its common stock during the period immediately preceding the share-based award grant that is equal in length to the award’s expected term. The Company believes that historical volatility represents the best estimate of future long term volatility.

Risk-Free Interest Rate—This is the average interest rate consistent with the yield available on a U.S. Treasury note (with a term equal to the expected term of the underlying grants) at the date the option was granted.

F-19

Expected Term of Options—This is the period of time that the options granted are expected to remain outstanding. The Company uses a simplified method for estimating the expected term of service based awards granted. For performance based and market based awards, the expected term of service is based on the derived service period.

Expected Dividend Yield—The Company has never declared or paid dividends on its common stock and does not anticipate paying any dividends in the foreseeable future. As such, the dividend yield percentage is assumed to be zero.

Forfeiture Rate—This is the estimated percentage of options granted that are expected to be forfeited or cancelled on an annual basis before becoming fully vested. The Company estimated the forfeiture rate for 2016 based on historical forfeiture experience for similar levels of employees to whom options were granted. Beginning in 2017, in accordance with authoritative guidance, forfeitures were no longer required to be estimated.

Following are the weighted-average assumptions used in valuing the stock options granted to employees during the years ended December 31, 2017 and 2016:

	Years ended December 31,
	2017			2016
Expected volatility		78.88	%		82.12	%
Risk free interest rate		1.96	%		1.29	%
Expected term of option		6.29 years			5.33 years
Forfeiture rate		-			*3.00	%
Expected dividend yield		-			-

*- In 2016, authoritative guidance required forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Throughout 2016, forfeitures were estimated at 3% and the actual forfeiture rate was 6% for 2016. The Company adjusted stock compensation expense for 2016 based on the actual forfeiture rate.

The weighted average fair value of stock options granted was $0.73 and $0.75 in 2017 and 2016, respectively.

Share-based compensation expense recognized in the consolidated statements of operations is based on awards ultimately expected to vest, net of estimated forfeitures. The authoritative guidance requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

A summary of the Company’s stock option plans and of changes in options outstanding under the plans during the years ended December 31, 2017 and 2016 is as follows:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
						In Years
Outstanding at December 31, 2015		6,694,744		$	1.99
Exercised		-		$	-
Granted		4,213,518		$	1.00
Expired		(856,512	)	$	2.24
Forfeited		(516,444	)	$	1.14
Outstanding at December 31, 2016		9,535,306		$	1.57
Exercised		(154,545	)	$	2.11
Granted		3,199,500		$	1.05
Expired		(978,070	)	$	1.64
Forfeited		(16,876	)	$	0.92
Outstanding at December 31, 2017		11,585,315		$	1.42		7.46	$	21,730,182
Exercisable at December 31, 2017		8,468,971		$	1.57		6.78	$	14,781,148

The aggregate intrinsic value is calculated as the difference between (i) the closing price of the common stock at December 31, 2017 and (ii) the exercise price of the underlying awards, multiplied by the number of options that had an exercise price less than the closing price on the last trading day of the year. The intrinsic value of options exercised during the year ended December 31, 2017 totaled approximately $168,000. Cash received from option exercises under all share-based payment arrangements for the year ended December 31, 2017 was approximately $326,000. There were no options exercised in 2016.

F-20

The following summarizes information about stock options granted to employees and directors outstanding at December 31, 2017:

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number Outstanding at December 31, 2017		Weighted Average Remaining Contractual Life in Years		Weighted Average Exercise Price		Number Exercisable at December 31, 2017		Weighted Average Exercise Price
$0.00 - $1.00		3,950,656		8.9	$	0.93		1,538,965	$	0.87
$1.01 - $2.00		7,083,119		7.0	$	1.53		6,378,466	$	1.57
$2.01 - $3.00		375,000		4.2	$	2.24		375,000	$	2.24
$3.01 - $7.00		122,000		3.0	$	6.24		122,000	$	6.24
$7.01 - $8.00		54,540		1.5	$	7.26		54,540	$	7.26
		11,585,315		7.5	$	1.42		8,468,971	$	1.57

As of December 31, 2017, there was approximately $544,000 of total unrecognized compensation cost related to non-vested stock options. That cost is expected to be recognized over a weighted-average period of 1.8 years.

Warrants

Warrants issued generally expire after 2-5 years from the date of issuance. Stock warrant activity is as follows:

	Number of Shares			Weighted Average Exercise Price
Outstanding at December 31, 2015		4,010,903		$	2.27
Issued		4,625,510		$	1.69
Exercised		-		$	-
Expired		(2,247,912	)	$	2.91
Outstanding at December 31, 2016		6,388,501		$	1.60
Issued		1,638,506		$	3.75
Exercised		-		$	-
Expired		(1,762,991	)	$	1.46
Outstanding at December 31, 2017		6,264,016		$	2.23
Exercisable at December 31, 2017		4,625,510		$	1.69

10. COMMITMENTS AND CONTINGENCIES

COMMITMENTS

ENMD-2076. In January 2006, the Company acquired Miikana, a private biotechnology company. Pursuant to the Merger Agreement, the Company acquired all of the outstanding capital stock of Miikana Therapeutics, Inc. In 2008, the Company initiated a Phase 1 clinical trial with its Aurora A and angiogenic kinase inhibitor, ENMD-2076, in patients with solid tumors. A dosing of the first patient with ENMD-2076 triggered a purchase price adjustment milestone of $2 million, which the Company opted to pay in stock. As ENMD-2076 successfully completed Phase 1 clinical trials and advanced to Phase 2, the dosing of the first patient in 2010 triggered an additional purchase price adjustment milestone of $3 million, which was paid in stock in 2010. Under the terms of the merger agreement, the former Miikana stockholders may earn up to an additional $4 million of potential payments upon the satisfaction of additional clinical and regulatory milestones for ENMD-2076. As of December 31, 2017, the $4 million potential milestone payment remains, payable in cash or shares of stock at the Company’s option, related to the ENMD-2076 program and the dosing of the first patient in a Phase 3 pivotal trial.

With respect to the Company’s in-licensed drug candidates for the Greater China market, the Company does not have to pay any milestone payments or royalties to Spectrum; however, CASI is responsible for paying royalties or milestones, if and when applicable, owed by Spectrum to upstream licensors that licensed related technology to Spectrum in accordance with the terms of the relevant upstream licenses, and only to the extent of the Greater China portion of such upstream royalties or milestones. The Company’s sales of Zevalin in Hong Kong are subject to royalties. The Company does not expect to pay royalties for ZEVALIN^® in China and Taiwan until commercial activities begin which will not occur until after ZEVALIN^® receives marketing approval from the regulatory agencies and which is not expected to occur in 2018.  The Company does not anticipate any payment obligations for the EVOMELA^® and MARQIBO^® programs in 2018.

F-21

As of December 31, 2017, the Company also has purchase obligation commitments, in the normal course of business, for clinical trial contracts totaling approximately $300,000. In March 2018, the Company committed to a purchase obligation of EVOMELA^® from Spectrum for approximately $5.5 million.

The Company leases its principal executive offices in Rockville, MD under a lease agreement that continues through December 31, 2019. The Company leases office space in China under a lease agreement that continues through June 2018. The Company also leases lab space in China that continues through May 2022.

The future minimum payments under its facilities leases are as follows:

2018	$	337,030
2019		259,459
2020		183,378
2021		191,691
2022		44,172
Thereafter		-
Total minimum payments	$	1,015,730

Rental expense for the years ended December 31, 2017 and 2016 was approximately $440,000 and $328,000, respectively.

CONTINGENCIES

The Company is subject in the normal course of business to various legal proceedings in which claims for monetary or other damages may be asserted. Management does not believe such legal proceedings, unless otherwise disclosed herein, are material.

11. EMPLOYEE RETIREMENT PLAN

The Company sponsors the CASI Pharmaceuticals, Inc. 401(k) Plan and Trust. The plan covers substantially all employees and enables participants to contribute a portion of salary and wages on a tax-deferred basis. Contributions to the plan by the Company are discretionary. Contributions by the Company totaled approximately $70,167 and $30,300 in 2017 and 2016, respectively.

12. SUBSEQUENT EVENT

On January 26, 2018, the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) by and between the Company and Sandoz Inc. (“Sandoz”), pursuant to which the Company acquired a portfolio of 25 U.S. FDA-approved ANDAs, 1 ANDA that FDA tentatively approved, 3 ANDAs that are pending FDA approval, and manufacturing and other information related to the products (the “Assets”). The purchase of the Assets closed simultaneously with the execution of the Asset Purchase Agreement.  Pursuant to the Asset Purchase Agreement, the purchase price for the Assets was $18 million in cash paid at closing.

F-22

EX-10.26

Exhibit 10.26

CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

ASTERISKS DENOTE OMISSIONS.

ASSET PURCHASE AGREEMENT

Between

CASI PHARMACEUTICALS, INC.

and

SANDOZ INC.

Dated as of January 26, 2018

TABLE OF CONTENTS

PAGE

1.   DEFINITIONS.	1
2.   PURCHASE AND SALE OF PURCHASED ASSETS.	5
3.   ASSUMPTION OF LIABILITIES; RETAINED LIABILITIES.	7
4.   PURCHASE PRICE AND PAYMENT.	9
5.   CLOSING.	9
6.   REPRESENTATIONS AND WARRANTIES.	10
7.   INDEMNIFICATION.	13
8.   LIMITATION OF LIABILITY.	14
9.   INSURANCE.	14
10.   EXCLUSIVE REMEDIES.	14
11.   CONFIDENTIAL INFORMATION; PUBLICITY; USE OF CORPORATE NAMES.	15
12.   REGULATORY MATTERS.	16
13.   TRANSFER TAXES.	17
14.   NON-COMPETE.	17
15.   POST-CLOSING NEGOTATIONS.	18
16.   FURTHER ASSURANCES; TECHNICAL TRANSFER ACTIVITIES.	18
17.   MISCELLANEOUS.	19

i

Executive Version

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (this “Agreement”) is entered into as of January 26, 2018, by and between CASI Pharmaceuticals, Inc., a Delaware corporation, with offices at 9620 Medical Center Drive, #300, Rockville, Maryland 20850 (“Buyer”), and Sandoz Inc., a Colorado corporation, with offices at 100 College Road West, Princeton, New Jersey 08540 (“Seller”).

RECITALS

WHEREAS, Seller owns certain pharmaceutical products which have associated ANDAs (as defined below) as listed on Schedule 1.3 (collectively, the “Products”, as further defined below); and

WHEREAS, Buyer wishes to purchase the Purchased Assets from Seller, all upon the terms and subject to the conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the foregoing premises and the representations, warranties, covenants and agreements herein contained, Seller and Buyer, intending to be legally bound, hereby agree as follows:

1.DEFINITIONS. For the purposes of this Agreement, capitalized terms used herein have the meaning set forth below (the singular shall be interpreted to include the plural and vice versa, unless the context clearly dictates otherwise):

1.1“Affiliate” means, with respect to any Person named herein, any other Person that is controlled by, controls, or is under common control with the named Person. “Control” of a business entity means any of: (a) direct or indirect beneficial ownership of fifty percent (50%) or more of the voting interest in such entity, (b) the right to appoint fifty percent (50%) or more of the directors or management of such entity, or (c) the power to otherwise direct the management and policies of such entity.

1.2“Ancillary Agreements” means the Pharmacovigilance Agreement, Quality Agreement, Transition Agreement and any other agreements contemplated by or actually entered into by the Parties in connection with this Agreement and/or any of the foregoing agreements.

1.3“ANDAs” means the Abbreviated New Drug Applications pursuant to 21 U.S.C. §355(j) and regulations promulgated thereunder, and all amendments and supplements thereof as set forth on Schedule 1.3. Buyer hereby acknowledges and agrees that certain of the ANDAs have been filed with the FDA but have not received FDA approval, as indicated on Schedule 1.3.

1.4“API Provider List” means the list on Schedule 1.4 of each Person who provides active pharmaceutical ingredients to Seller with respect to the Products set forth on Schedule 1.4.

1.5“Assumed Liabilities” shall have the meaning ascribed to the term in Section 3.1 of this Agreement.

1.6“Bill of Sale” means a bill of sale to be executed and delivered by each Party on the Closing Date attached hereto in Exhibit A.

1.7“Business Day” means any day, other than Saturday, Sunday or other day on which commercial banks are authorized or required to close in New York, New York.

1.8“Cap” shall have the meaning ascribed to the term in Section 8.

1.9**.

1.10“Claim” includes a claim, notice, demand, action, proceeding, litigation, prosecution, arbitration, investigation, judgment, award, damage, loss, cost, expense or liability however arising, whether present, unascertained, immediate, future or contingent, whether based in contract, tort or statute and whether involving a Third Party or a Party or otherwise.

1.11“Closing” shall have the meaning ascribed to the term in Section 5.1.

1.12“Closing Date” shall have the meaning ascribed to the term in Section 5.1.

1.13“Confidential Information” shall have the meaning ascribed to the term in Section 11.2 of this Agreement.

1.14“Contracts” means all contracts, leases, deeds, mortgages, licenses, instruments, notes, commitments, undertakings, indentures, joint ventures and all other agreements, commitments and arrangements, whether written or oral.

1.15“Data Room Materials” means (a) all the Records and (b) any other documents related to the Products, in each case, made available to Buyer for inspection in the electronic data room.

1.16“Deductible” shall have the meaning ascribed to the term in Section 8.

1.17“Encumbrance” means any mortgage, pledge, assessment, security interest, deed of trust, lease, lien, levy, charge or other encumbrance, or any conditional sale or title retention agreement or other agreement to give any of the foregoing in the future.

1.18“Excluded Assets” means any assets of any kind, nature, character or description (whether real, personal or mixed, whether tangible or intangible, whether absolute, accrued, contingent, fixed or otherwise, and wherever situated) that are not expressly included within the definition of Purchased Assets.

1.19“Excipient Vendor List” means the list set forth on Schedule 1.4 of each Person who supplies excipients to Seller with respect to the Products set forth on Schedule 1.4.

1.20“Expiration Date” shall have the meaning ascribed to the term in Section 6.3.

1.21“FDA” means the United States Food and Drug Administration and all divisions under its direct control or any successor organizations.

1.22“Fundamental Representations” shall have the meaning ascribed to the term in Section 6.3.

1.23“Governmental Entity” means any arbitrator, court, judicial, legislative, administrative, or regulatory agency, commission, department, board, or bureau or body or other government authority or instrumentality or any Person or entity exercising executive, legislative, judicial, regulatory, or administrative functions of or pertaining to government, whether foreign or domestic, whether federal, state, provincial, municipal, or other.

^** This portion has been redacted pursuant to a confidential treatment request.

2

1.24“Governmental Order” means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Entity.

1.25“Indemnitee” shall have the meaning ascribed to that term in Section 7.3.1.

1.26“Indemnitor” shall have the meaning ascribed to that term in Section 7.3.1.

1.27“Intellectual Property Agreements” means the agreements set forth on the “Schedule of Settlements” document in the electronic data room.

1.28“Law” means any statute, law, ordinance, regulation, rule, code, order, constitution, treaty, common law, Governmental Order, legally binding guidance documents, other requirement or rule of law of any Governmental Entity related to the development, registration, Manufacture, importation, distribution, sale or marketing of the Products in the Territory or any obligation under, or related to, this Agreement and the transactions contemplated herein, and those obligations applicable to the ANDAs.

1.29“Legal Proceeding” means any Claim, action, suit, case, litigation, proceeding, audit, charge, criminal prosecution, judicial, governmental or regulatory investigation, arbitration, mediation, hearing, alternative dispute resolution proceeding, administrative proceeding, opposition, cancellation, warning letter, or notice of violation.

1.30“Liabilities” means any and all debts, liabilities and obligations of any nature, whether accrued or fixed, absolute or contingent, matured or unmatured, or known or unknown, including those arising under Law or governmental action and those arising under any contract, arrangement, commitment or undertaking, or otherwise.

1.31“Losses” means all losses, costs, damages, judgments, settlements, interest, fees or expenses, including all reasonable attorneys’ fees, experts’ or consultants’ fees, expenses and costs.

1.32“Manufacture” and “Manufacturing” means, with respect to a particular Product, the manufacture and preparation of that Product and includes the manufacturing, processing, filling, formulating, testing (including in-process testing), holding and storing, packaging, labeling, quality control testing and release of such Product.

1.33“Manufacturing Process” means the process (or any step in the process) used or planned to be used by Seller (or any of its permitted Affiliates or subcontractors) for the Manufacture of Product.

1.34“Master Batch Record” means, for any Product, as applicable, the description of the Manufacturing Process for such Product as set forth in such Product’s ANDA, including, the list of Raw Materials, the standard operating procedures, work instructions to be applied in production, in-process controls, the quality standards (including in-process and release testing), analytical procedures and batch analysis data in electronic format, and acceptance criteria.

1.35“NDC” means a national drug code as issued by FDA.

1.36“Party” or “Parties” means Seller or Buyer, as applicable.

3

1.37“Permitted Encumbrance” means (a) Encumbrances for Taxes which are not yet due and payable or which are being contested in good faith by appropriate proceedings and for which appropriate reserves have been established in accordance with International Financial Reporting Standards, (b) statutory mechanics’, carriers’, workmen’s, landlords’ or other similar liens arising or incurred in the ordinary course of business which are not yet delinquent or the validity of which are being contested in good faith by appropriate proceedings, or (c) other Encumbrances that (i) are not Encumbrances on intellectual property and (ii) that are incurred in the ordinary course of business that, individually and in the aggregate, do not and would not reasonably be expected to materially detract from the value or impair the use of the property subject thereto or make such property unmarketable.

1.38“Person” means any individual, partnership (general or limited), association, corporation, limited liability company, joint venture, trust, estate, limited liability partnership, unincorporated organization, government (or any agency or political subdivision thereof) or other legal person or organization.

1.39“Pharmacovigilance Agreement” means the agreement related to the Products attached hereto as Exhibit B.

1.40“Product(s)” means any pharmaceutical products that are Manufactured, promoted, offered for sale or sold pursuant to any of the ANDAs.

1.41“Purchase Price” shall have the meaning ascribed to that term in Section 4.1.1 of this Agreement.

1.42“Purchased Assets” means all Seller’s right, title and interest in the (a) ANDAs on Schedule 1.3; (b) Data Room Materials and, without duplication, any other Records; (c) Sample Products, including the applicable commercial package and labeling; (d) the Raw Materials set forth on Schedule 1.44; and (e) such Intellectual Property Agreements as are transferred to Buyer in accordance with Section 2.4. The “Purchased Assets” shall not include any Excluded Assets.

1.43“Quality Agreement” means the agreement related to the Products attached hereto as Exhibit C.

1.44“Raw Materials” means the active pharmaceutical ingredients (API) to the extent set forth on Schedule 1.44.

1.45“Records” means copies of: (a) the existing ANDAs, (b) material, official, written correspondence with FDA specifically related to the review and approval of any Product, (c) annual reports, CBE 0, CBE 30 and Prior Approval Supplements (PAS), in each case, specifically related to the ANDAs, (d) warning letters and responses related to the ANDAs, (e) periodic adverse event reports (PADER) specifically relating to the Products in the possession of Seller as of the Closing Date, (f) FDA Approval Letters issued pursuant to 21 U.S.C. §355(j) with respect to the ANDAs, as applicable, (g) Master Batch Records, process validation protocols, SOPS, scale-up and equipment information (h) chemistry, manufacturing and control (CMC) data related to the Products, which shall be produced in ECTD format to the extent such data is available in such format and (i) the Technical Transfer Documentation; provided, however, that “Records” shall not include any pricing or financial information related to the distribution of the Products or any agreements with customers.

1.46“Retained Liabilities” has the meaning ascribed to the term in Section 3.2.

1.47“Restricted Period” has the meaning ascribed to the term in Section 14.1.

4

1.48“Sample Product(s)” means the number of units of certain Product, in one case, as set forth on Schedule 1.48.

1.49“SEC” shall have the meaning ascribed to that term in Section 11.3.

1.50“Seller’s Knowledge” shall mean ** knowledge ** of the Seller or its Affiliate’s employees whose names are set forth on Schedule 1.50 attached hereto. “Seller’s Knowledge” shall not: (a) be construed to refer to the knowledge of any other officer, director, employee, representative or agent of the Seller, or any Affiliate of Seller or (b) to impose upon such employees listed on Schedule 1.50 any individual personal liability.

1.51“Seller Distribution Term” means the period starting on the Closing Date and ending on (a) the date that is ** months after the Closing Date for all Products except the ** and (b) with respect to the **, the date that is ** months after the Closing Date.

1.52“Taxes” means taxes, duties, fees, premiums, assessments, imposts, levies and other charges of any kind whatsoever imposed by any Governmental Entity, including all interest, penalties, fines, additions to tax or other additional amounts imposed by any Governmental Entity in respect thereof, and including those levied on, or measured by, or referred to as, income, gross receipts, profits, capital, transfer, land transfer, sales, goods and services, harmonized sales, use, value-added, excise, stamp, withholding, business, franchising, property, development, occupancy, employer health, payroll, employment, health, social services, education and social security taxes, all surtaxes, all customs duties and import and export taxes, countervail and anti-dumping, all license, franchise and registration fees and all employment insurance, health insurance and government pension plan premiums or contributions.

1.53“Technical Transfer Documentation” means the documentation listed in Exhibit G.

1.54“Territory” means the fifty states of the United States of America, the District of Columbia, the Commonwealth of Puerto Rico, Guam, American Samoa, the U.S. Virgin Islands and all territories and possessions of the United States of America and United States military bases. For the avoidance of doubt, subsequent to the Closing and subject only to Section 2.3, Buyer shall own the rights to all of the Purchased Assets worldwide.

1.55“Third Party” means any Person other than Seller, Buyer or their respective Affiliates.

1.56“Transition Agreement” means the agreement attached hereto as Exhibit F.

2.PURCHASE AND SALE OF PURCHASED ASSETS.

2.1Purchase and Sale of Assets. Subject to the terms and conditions of this Agreement, at the Closing Date, Seller shall sell, transfer, convey, assign and deliver to Buyer, free and clear of all Encumbrances, and Buyer shall purchase, acquire and accept from Seller, all of Seller’s right, title and interest, as of the Closing, in and to the Purchased Assets.

2.2Excluded Assets and Retention of Certain Information. Notwithstanding anything herein to the contrary, (a) from and after the Closing Date, Seller and its Affiliates shall retain all their right, title and interest in and to the Excluded Assets, and (b) Seller and its Affiliates may, with respect to the Purchased Assets, retain copies of the ANDAs and all Data Room Materials which, following the Closing Date, may be used only as contemplated in this Agreement or any Ancillary Agreement and as required to comply with Laws, subject to Seller’s confidentiality obligations hereunder.

^** This portion has been redacted pursuant to a confidential treatment request.

5

2.3Limitation of Use of Certain Purchased Assets.

2.3.1Notwithstanding anything herein to the contrary, Buyer agrees that it shall not have the right to utilize, or license or transfer to any other Person the Sample Products or the sample packaging and labeling included in the Purchased Assets for any purpose other than in connection with regulatory or research and development efforts in connection with the Products. In no event shall Buyer have the right to, directly or indirectly, use any of the Sample Products (a) in human beings or (b) for any commercial purpose.

2.3.2Notwithstanding anything herein to the contrary, Buyer agrees that **.

2.4Intellectual Property Agreements. After the Closing Date, Seller shall use commercially reasonable efforts to obtain written consents that would permit Seller to assign the Intellectual Property Agreements to Buyer.  In the event that Seller obtains such consent as to an Intellectual Property Agreement, Seller shall provide written notice to Buyer that it has received such consent. Unless Buyer informs Seller within ** Business Days of receipt of such notice that Buyer rejects the assignment of such Intellectual Property Agreement, at such time as the Seller Distribution Term terminates, Buyer and Seller shall execute an assignment agreement substantially in the form attached hereto in Exhibit D and such Intellectual Property Agreement shall be deemed a Purchased Asset as of such time. If Seller is not able to obtain any such written consent(s) or Buyer rejects the assignment of any Intellectual Property Agreement, then Buyer hereby acknowledges that Seller shall not be in breach of this provision with respect to such Intellectual Property Agreement and all Liabilities associated with such Intellectual Property Agreement shall remain Retained Liabilities.

2.5Appointment of Seller As Distributor.

2.5.1Beginning on the Closing Date and continuing until the end of the Seller Distribution Term, subject to the other terms of this Section 2.5 below, Seller, either directly or through its Affiliates, shall have the right (but not the obligation) to market, have marketed, distribute, have distributed, offer to sell, sell, commercialize, have commercialized and otherwise exploit (collectively, for purposes of this Section 2.5, “Distribute”) the applicable Products to its Third Party customers, **; provided, that, notwithstanding anything to the contrary in this Agreement, Seller does not currently have and shall not be required to maintain field force promotion of the Products.

2.5.2Notwithstanding the foregoing, Seller may only Distribute, during the Seller Distribution Term, to Third Party customers **. On and after the Closing Date, Seller is authorized to Manufacture any Products to the extent necessary to allow Seller to perform under this Section 2.5; provided, however, that Seller shall send written notice to Buyer of any Products and amounts so Manufactured.

2.5.3** shall be responsible for ** Liabilities and for ** economic benefits or losses arising from ** under this Section 2.5. ** shall be responsible for the payment of any sales or other Taxes and rebates relating to the provision of goods or services with respect to any Products distributed pursuant to this Section 2.5.

^** This portion has been redacted pursuant to a confidential treatment request.

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2.5.4Notwithstanding the foregoing, during the Seller Distribution Term, Buyer shall have the right (but not the obligation) to engage in any discussions or negotiations with any Third Parties for such Third Parties to Distribute the Products following the end of the Seller Distribution Term; provided, that, Buyer shall not be permitted to execute any definitive agreements for such Distribution rights with any such Third Parties that have an effective date beginning prior to the end of such Seller Distribution Term. Notwithstanding the foregoing: (i) **; and (ii) in the event that **, Seller shall use commercially reasonable efforts to notify Buyer within ten (10) Business Days after such cessation, and after Buyer’s receipt of such notice, Buyer shall no longer be restricted from executing any definitive agreements with Third Parties to Distribute such Product.

2.5.5Seller shall Distribute Products under this Section 2.5: (a) in substantially the **; and (b) in accordance with applicable Laws. ** shall be ** responsible to ** for all errors, omissions and delays in ** Distribution of Products and all Liabilities related to ** Distribution of Products under this Section 2.5, or ** failure to Distribute Products in accordance with this Section 2.5.

2.5.6Subject to the terms and conditions contained herein, during the Seller Distribution Term, the Parties shall use good faith efforts to cooperate with each other in the Distribution of Products and shall use reasonable efforts to exchange information specifically related to the Distribution of Products pursuant to this Section 2.5 (such information exchange shall not include any type of pricing information and shall be subject to Seller’s confidentiality obligations to any Person, including Seller’s customers).

2.5.7Buyer shall be entitled to terminate Seller’s rights under this Section 2.5 upon Seller’s material breach of the provisions of this Agreement; provided, however, that Buyer may only terminate this Section 2.5 under this Section 2.5.7 if such breach is not cured within ** days following Buyer’s notice to Seller of such breach.

2.5.8For the avoidance of doubt, nothing contained in this Agreement shall give Buyer any right, directly or indirectly, to use the Sandoz Names and Marks (defined below).  “Sandoz Names and Marks” means the corporate mark, trade mark, house mark, trade name and trade dress, including the name Sandoz and any variants thereof, product identification numbers (including NDCs), and consumer information telephone numbers appearing on the Product labelling.

3.ASSUMPTION OF LIABILITIES; RETAINED LIABILITIES.

3.1Assumed Liabilities. Subject to the terms and conditions of this Agreement and of any Ancillary Agreement, Buyer agrees, effective as of the Closing Date, to assume the following Liabilities of Seller and its Affiliates relating to the Purchased Assets, (all such Liabilities being collectively referred to herein as “Assumed Liabilities”):

3.1.1any Liabilities, commitments or obligations to any Governmental Entity first arising on or after the Closing Date in connection with the Purchased Assets or the Products sold on or after Closing Date (other than Liabilities arising out of any sales made by Seller and its Affiliates following the Closing pursuant to Section 2.5 of this Agreement, unless any such Liability arises out of Buyer’s negligence, misconduct or breach of this Agreement or any Ancillary Agreement, in which case such Liability shall be treated as an Assumed Liability);

^** This portion has been redacted pursuant to a confidential treatment request.

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3.1.2all Liabilities for Taxes arising out of or relating to ownership, use or sale by or on behalf of Buyer or its Affiliates of the Purchased Assets in any taxable period, or a portion thereof, beginning on or after the Closing Date (other than Taxes arising out of any sales made by Seller and its Affiliates following Closing pursuant to Section 2.5 of this Agreement);

3.1.3all Liabilities arising out of or relating to any Legal Proceedings commenced on or after the Closing Date, irrespective of the legal theory asserted, arising from the Purchased Assets or the Manufacture, advertising, marketing, distribution, sale or use of the Products by or on behalf of Buyer or its Affiliates (other than Liabilities arising out of any sales made by Seller and its Affiliates following Closing pursuant to Section 2.5 of this Agreement, unless any such Liability arises out of Buyer’s negligence, misconduct or breach of this Agreement or any Ancillary Agreement, in which case such Liability shall be treated as an Assumed Liability);

3.1.4all Liabilities arising out of or relating to any return of the Products sold by or on behalf of Buyer or its Affiliates on or after the Closing Date (other than Liabilities arising out of any sales made by Seller and its Affiliates following Closing pursuant to Section 2.5 of this Agreement, unless any such Liability arises out of Buyer’s negligence, misconduct or breach of this Agreement or any Ancillary Agreement, in which case such Liability shall be treated as an Assumed Liability);

3.1.5any and all Liabilities and obligations of the Buyer that arise on or after the Closing Date out of or related to the Purchased Assets or Products under Sections 12.2 and 12.3 of this Agreement;

3.1.6in the event the Intellectual Property Agreements are assigned by Seller to Buyer pursuant to Section 2.4 above, all Liabilities related to the Intellectual Property Agreements assumed by the Buyer arising on or after the date of such assignment (other than Liabilities arising out of any sales made by Seller and its Affiliates following the date of such assignment pursuant to Section 2.5 of this Agreement, unless any such Liability arises out of Buyer’s negligence, misconduct or breach of this Agreement or any Ancillary Agreement, in which case such Liability shall be treated as an Assumed Liability); and

3.1.7any and all other Liabilities and obligations that arise out of or are related to the Purchased Assets or Products attributable to occurrences and circumstances arising on or after the Closing Date (other than any Liabilities or obligations related to any sales made by Seller and its Affiliates following Closing pursuant to Section 2.5 of this Agreement, unless any such Liability arises out of Buyer’s negligence, misconduct or breach of this Agreement or any Ancillary Agreement, in which case such Liability shall be treated as an Assumed Liability).

3.2Retained Liabilities. Subject to the terms and conditions of this Agreement and of any Ancillary Agreement, other than the Assumed Liabilities, Seller and its Affiliates shall retain and be responsible for the following, except, in each case, to the extent such Liability arises out of Buyer’s negligence, misconduct or breach of this Agreement or any Ancillary Agreement (in which case such Liability shall be treated as an Assumed Liability) (collectively, “Retained Liabilities”):

3.2.1all Liabilities arising out of or relating to any Legal Proceedings commenced before or after the Closing Date, irrespective of the legal theory asserted, arising from the Manufacture, advertising, marketing, distribution, sale or use of the Products before the Closing Date;

3.2.2all Liabilities arising out of or relating to any Legal Proceedings commenced after the Closing Date, irrespective of the legal theory asserted, arising from any sales of Products by Seller or its Affiliates following Closing Date pursuant to Section 2.5 of this Agreement;

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3.2.3all Liabilities arising out of or relating to any return of the Products sold by Seller or its Affiliates either (a) before the Closing Date or (b) on or after the Closing Date pursuant to Section 2.5 of this Agreement;

3.2.4all other Liabilities and obligations that arise out of or are related to the Purchased Assets or Products attributable to occurrences and circumstances arising (a) before the Closing Date; or (b) on or after the Closing Date related to any Manufacture of Products by Seller or its Affiliates or sales made by Seller and its Affiliates following the Closing Date pursuant to Section 2.5 of this Agreement;

3.2.5all Liabilities for Taxes (a) arising out of or relating to the ownership of the Purchased Assets in any taxable period, or a portion thereof, prior to the Closing Date; (b) arising out of any Product sales made by Seller or its Affiliates to Third Parties following the Closing Date pursuant to Section 2.5 of this Agreement; or (c) relating to any activity of Seller or its Affiliates unrelated to the Purchased Assets;

3.2.6all Liabilities to the extent arising from the Excluded Assets;

3.2.7all Liabilities under the Intellectual Property Agreements resulting from Seller’s breach of such Intellectual Property Agreements prior to the date of assignment, if any, of such Intellectual Property Agreement pursuant to Section 2.4 above;

3.2.8all Liabilities arising out of any of Seller’s Contracts with Third Parties that are specific to the Products; and

3.2.9all other Liabilities arising out of or relating to the Purchased Assets to the extent such Liabilities relate to the period prior to the Closing Date.

The Parties agree that neither Buyer nor any of its Affiliates shall assume or be deemed to have assumed any Retained Liabilities.

4.PURCHASE PRICE AND PAYMENT.

4.1Purchase Price. As consideration for the Purchased Assets and Seller’s full and faithful performance of all its obligations hereunder, Buyer shall at Closing:

4.1.1pay to Seller by wire transfer of immediately available funds an amount equal to Eighteen Million US Dollars ($18,000,000) (the “Purchase Price”); and

4.1.2assume the Assumed Liabilities.

5.CLOSING.

5.1Time and Place. The closing of the transactions contemplated by this Agreement, including the purchase and sale of the Purchased Assets and the assumption of the Assumed Liabilities (the “Closing”), shall take place remotely via the exchange of documents and signature pages on the date hereof (the “Closing Date”).

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5.2Deliveries at Closing.

5.2.1Closing Deliveries by Seller. At the Closing, Seller shall deliver or cause to be delivered to Buyer:

5.2.1.1the Bill of Sale executed by Seller;

5.2.1.2one (1) physical and / or electronic copy (as available) of each of the ANDAs on Schedule 1.3 and the Data Room Materials for the ANDAs (except that certain of the Technical Transfer Documentation will be delivered in accordance with Section 16.1.2);

5.2.1.3the Pharmacovigilance Agreement executed by Seller;

5.2.1.4the Transition Agreement executed by Seller; and

5.2.1.5the Quality Agreement executed by Seller.

5.2.2Closing Deliveries by Buyer. At the Closing, Buyer shall deliver or cause to be delivered to Seller:

5.2.2.1the Bill of Sale executed by Buyer;

5.2.2.2the Purchase Price;

5.2.2.3the Pharmacovigilance Agreement executed by Buyer;

5.2.2.4the Transition Agreement executed by Buyer; and

5.2.2.5the Quality Agreement executed by Buyer.

6.REPRESENTATIONS AND WARRANTIES.

6.1Mutual Representations and Warranties. Each of the Parties represents and warrants to the other Party that:

6.1.1such Party has the corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby;

6.1.2neither the execution and delivery of this Agreement or the Ancillary Agreements by such Party, nor its performance hereunder, conflicts with or will result in any violation or breach of, or constitutes (with or without due notice or lapse of time or both) a default under any of the terms or conditions of the organizational documents of such Party nor any note, indenture, license, agreement or other instrument or obligation to which it is a party or by which it or any of its properties or assets may be bound; or to the best of Seller’s Knowledge, violates any Law;

6.1.3this Agreement is a legal, valid and binding agreement of such Party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other similar laws affecting creditors’ rights generally from time to time in effect and to general principles of equity (including concepts of materiality, reasonableness, good faith and fair dealing), regardless of whether considered in a proceeding in equity or at law;

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6.1.4such Party has not, and will not, directly or indirectly, enter into any Contract or any other transaction with any Third Party that conflicts or derogates from its undertakings hereunder; and

6.1.5such Party (a) has never been, and its employees involved in the development and approval of any Product had not been during their term of employment with Seller, debarred, suspended, or convicted of a crime for which a person can be debarred or suspended under 21 U.S.C. § 335a (“335a”), nor to Seller’s Knowledge, threatened in writing to be debarred, suspended, or indicted for a crime or otherwise engaged in conduct for which a person can be debarred or suspended under 21 U.S.C. § 335a; (b) agrees that it will promptly notify such other Party in the event of any such debarment, suspension, conviction, threat, or indictment of any employee performing under this Agreement that occurs during the Seller Distribution Term; and (c) agrees not to employ any person in connection with the performing under this Agreement who has been debarred, suspended, or convicted of a crime for which a person can be debarred, suspended, or threatened to be debarred, suspended, or indicted for a crime for which a person can be debarred or suspended under 335a.

6.2Seller Representations and Warranties. Seller represents and warrants to Buyer as of the Closing Date that:

6.2.1Title. Seller has good and marketable title to the Purchased Assets, free and clear of all Encumbrances (other than Permitted Encumbrances).

6.2.2Seller Intellectual Property.

6.2.2.1**.

6.2.2.2Except as set forth on Schedule 6.2.2.2, there have been and are no Legal Proceedings (including any oppositions, interferences or re-examinations) settled, pending or, to Seller’s Knowledge, threatened in writing (including in the form of offers to obtain a license), alleging that the Products infringe, misappropriate, dilute or otherwise violate the intellectual property of any Person in the Territory; nor to Seller’s Knowledge is there any basis for such a Legal Proceeding.

6.2.2.3The financial information provided by Seller to Buyer in electronic form via the Data Room **. The other documentation relating to the Products and included in the Data Room Materials is current, **, and such documentation will be in tangible form as part of the Purchased Assets of the Closing.

6.2.3Legal Proceedings; Governmental Orders.

6.2.3.1Other than as set forth in Schedule 6.2.3.1, there are no Legal Proceedings pending or, to Seller’s Knowledge, threatened in writing against Seller or any Affiliate (a) specifically relating to the Purchased Assets; or (b) that challenge or seek to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement.

6.2.3.2Other than as set forth in Schedule 6.2.3.2, in the ** years prior to the Closing Date, none of the Products, nor the commercialization or distribution thereof by Seller or its Affiliates, was previously the subject of any Legal Proceeding brought, or, to Seller’s Knowledge, threatened in writing against Seller or any Affiliate, except as would not be reasonably expected to have a material adverse effect on the Purchased Assets.

^** This portion has been redacted pursuant to a confidential treatment request.

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6.2.3.3To Seller’s Knowledge, there are no outstanding Governmental Orders and no unsatisfied judgments, penalties or awards against, relating to or affecting the Purchased Assets.

6.2.4Compliance With Laws.

6.2.4.1To Seller’s Knowledge, Seller is in compliance, in all material respects with all Laws applicable to Seller’s ownership and use of the Purchased Assets, except as would not be reasonably expected to have a material adverse effect on the Purchased Assets.

6.2.4.2Other than **, to Seller’s Knowledge, no regulatory approvals are necessary for the development, Manufacture, commercialization or distribution of the Products within the Territory. As used herein, ** means the ** and all divisions under its direct control or any successor organizations.

6.2.4.3Seller has delivered to Buyer a full and complete copy of the approved ANDA for each Product, including supplements and records that are required to be kept pursuant to 21 C.F.R. § 314.81. Through the Closing, Seller has paid all fees and made all communications with FDA or other Governmental Entities as required by Law in respect of the ANDAs. Seller has paid all fees due and owing for periods through the Closing under Generic Drug User Fee Amendments of 2012 and has filed all required reports (including adverse drug experience reports) with the appropriate Governmental Entities.

6.2.4.4API Providers and Excipient Vendors. Schedule 1.4 contains an accurate and complete list of each Person who provides active pharmaceutical ingredients to Seller with respect to any of the Products. Schedule 1.4 also contains an active and complete list of each Person who supplies excipients to Seller with respect to any of the Products. The Data Room Materials includes, to the best of Seller’s Knowledge, Seller’s latest contact information for such Persons.

6.2.5No Recalls. During the ** years prior to the Closing Date, other than as set forth in Schedule 6.2.5, none of the Products sold by Seller have been the subject of any recalls, withdrawals or field corrections, and Seller has not received any written notice from a Government Entity requiring, nor, to Seller’s Knowledge, is there a factual basis for Seller or a Government Entity to initiate or require, such a recall, withdrawal or field correction of any of the Products.

6.3Survival of Representations and Warranties. All representations and warranties of Seller and Buyer contained herein or made pursuant hereto shall survive the Closing Date and shall remain operative and in full force and effect for a period of ** following the Closing Date (the “Expiration Date”); provided however, that the representations and warranties in **, **, and ** (collectively, the “Fundamental Representations”) shall survive the Closing Date and shall remain operative and in full force and effect for a period of ** following the Closing Date. Notwithstanding anything herein to the contrary, any breach of a representation or warranty that is the subject of a claim that is asserted in writing prior to the Expiration Date shall survive with respect to such claim or any dispute with respect thereto until the final resolution thereof.

^** This portion has been redacted pursuant to a confidential treatment request.

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6.4EXCEPT AS EXPRESSLY SET FORTH HEREIN, SELLER IS NOT MAKING AND HEREBY EXPRESSLY DISCLAIMS, ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR TITLE OR NONINFRINGEMENT, WITHOUT DEROGATING FROM THE GENERALITY OF THE FOREGOING, BUYER ACKNOWLEDGES AND AGREES THAT EXCEPT AS EXPRESSLY SET FORTH HEREIN SELLER IS SELLING THE PURCHASED ASSETS ON AN “AS IS” AND “WHERE IS” BASIS AND SELLER MAKES NO OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO THE PURCHASED ASSETS OR THE PRODUCTS INCLUDING, WITHOUT LIMITATION, ANY GUARANTEE THAT FDA APPROVAL WILL BE OBTAINED OR MAINTAINED, RELATING TO THE MANUFACTURE AND/OR MARKETING OF ANY PRODUCTS.

6.5Adequacy of Information. Buyer acknowledges and agrees that:

6.5.1it has been furnished with or given adequate access to the information about the Purchased Assets and Product as it has requested;

6.5.2it has carried out due diligence concerning the Purchased Assets and Products and is making its own independent evaluation of the Purchased Assets and Products; and

6.5.3Seller makes no warranty with respect to the accuracy and completeness of any estimates, projections, forecasts, plans, or budgets provided by Seller to Buyer.

6.6Buyer Representations and Warranties. Buyer represents and warrants to Seller as of the Closing Date that Buyer has sufficient cash on hand to enable it to make payment of the Purchase Price pursuant to Section 4.1.

7.INDEMNIFICATION.

7.1Buyer’s Indemnification Obligations. Buyer shall indemnify, defend and hold Seller and its Affiliates and their respective officers, directors, employees, agents and subcontractors harmless from and against any and all Losses arising out of or resulting from any Claims made or suits brought against such parties which arise or result from (a) Buyer’s breach of any of its representations or warranties set forth in Section 6 of this Agreement; (b) Buyer’s breach of any the covenants in this Agreement or any Ancillary Agreement, or any of its obligations hereunder or thereunder; or (c) any and all Assumed Liabilities.

7.2Seller’s Indemnification Obligations. Seller shall indemnify, defend and hold Buyer and its Affiliates and their respective officers, directors, employees, agents and subcontractors harmless from and against any and all Losses arising out of or resulting from any Claims made or suits brought against such parties which arise or result from (a) Seller’s breach of any of its representation or warranties set forth in Section 6 of this Agreement, (b) Seller’s breach of any of its covenants in this Agreement or any Ancillary Agreement, or any of its obligations hereunder or thereunder; (c) any and all Retained Liabilities; or (d) **.

7.3Indemnification Procedure.

7.3.1No claim for indemnification hereunder shall be valid unless notice of the matter which may give rise to such claim is given in writing by the indemnitee (the “Indemnitee”) to the Party against whom indemnification may be sought (the “Indemnitor”) as soon as reasonably practicable after such Indemnitee becomes aware of such claim; provided, however, that the failure to notify the Indemnitor shall not relieve it from any liability that it may have to the Indemnitee otherwise unless the Indemnitor demonstrates that the defense of the underlying Claim has been materially prejudiced by such failure to provide timely notice. Such notice shall request indemnification and describe the potential Losses and Claim giving rise to the request for indemnification, and provide, to the extent known and in reasonable detail, relevant details thereof. If the Indemnitor fails to give Indemnitee notice of its intention to defend any such Claim as provided in this Section within ** Business Days of receiving notice thereof the Indemnitee involved shall have the right to assume the defense thereof with counsel of its choice, at the Indemnitor’s expense, and defend, settle or otherwise dispose of such Claim with the consent of the Indemnitor, not to be unreasonably withheld or delayed.

^** This portion has been redacted pursuant to a confidential treatment request.

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7.3.2In the event the Indemnitor elects to assume the defense of a Claim, the Indemnitee of the Claim in question and any successor thereto shall permit Indemnitor’s counsel and independent auditors, to the extent relevant, reasonable access to its books and records and otherwise fully cooperate with the Indemnitor in connection with such Claim; provided, however, that (a) the Indemnitee shall have the right fully to participate in such defense at its own expense; (b) the Indemnitor’s counsel and independent auditors shall not disclose any Confidential Information of the Indemnitee to the Indemnitor without the Indemnitee’s consent; (c) access shall only be given to the books and records that are relevant to the Claim or Losses at issue. The defense by the Indemnitor of any such actions shall not be deemed a waiver by the Indemnitee of its right to assert a claim with respect to the responsibility of the Indemnitor with respect to the Claim or Losses in question. The Indemnitor shall have the right to settle or compromise any Claim against the Indemnitee (that the Indemnitor has defended pursuant to this Section 7.3.2) without the consent of the Indemnitee provided that the terms thereof: **. No Indemnitee shall pay or voluntarily permit the determination of any Losses which is subject to any such Claim while the Indemnitor is negotiating the settlement thereof or contesting the matter, except with the prior written consent of the Indemnitor, which consent shall not be unreasonably withheld or delayed.

8.LIMITATION OF LIABILITY. Notwithstanding anything herein to the contrary, Seller shall not have any indemnification obligations for any individual Losses arising from or in connection with the indemnification obligations in Section ** unless and until the aggregate amount of all such Losses for which such Seller shall be responsible exceeds ** (the “Deductible”), in which event Seller shall be required to pay the full amount of such Losses to the extent exceeding the Deductible, but only up to a maximum aggregate amount equal to ** (the “Cap”). Neither the Deductible nor the Cap shall apply to the indemnification obligations under Section ** that arise out of the Seller’s breach of the representations or warranties set forth in the Fundamental Representations; provided, however, that Seller’s maximum aggregate liability for indemnification obligations under Section ** that arise out of the Seller’s breach of the Fundamental Representations shall in no event exceed **.

9.INSURANCE. At all times from the first commercial sale of any Product(s) by Buyer on or after the Closing Date through the date which is ** after the final sale of such Product(s), Buyer will maintain product liability and other insurance (or self-insurance) for itself in amounts which are reasonable and customary in the United States pharmaceutical industry, provided in no event shall the product liability insurance amounts be less than ** per occurrence and ** in the aggregate limit of liability per year. Buyer shall provide written proof of such insurance to Seller upon request.

10.EXCLUSIVE REMEDIES. Other than with respect to claims for fraud or willful misconduct by a Person, following the Closing, the sole and exclusive remedy for any and all Claims arising under, out of, or related to this Agreement and the other Ancillary Agreements and the transactions contemplated hereby and thereby shall be the rights of indemnification set forth in Section 7 only, and no Person will have any other entitlement, remedy or recourse, whether in contract, tort or otherwise, it being agreed that all of such other remedies, entitlements and recourse are expressly waived and released by the Parties hereto to the fullest extent permitted by Law.

^** This portion has been redacted pursuant to a confidential treatment request.

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11.CONFIDENTIAL INFORMATION; PUBLICITY; USE OF CORPORATE NAMES.

11.1Confidential Information. Each Party agrees that at and after the Closing, it shall not, without the prior written consent of the other Party, (a) disclose to any Person such other Party’s Confidential Information (as defined below), except to those of its and its Affiliates’ employees or representatives who need to know such information for the purpose of exploiting its rights or fulfilling its obligations under this Agreement or any Ancillary Agreement (and then only to the extent that such persons are under an obligation to maintain the confidentiality of the Confidential Information), or (b) use any of such other Party’s Confidential Information for any reason other than as contemplated by this Agreement or any Ancillary Agreement. If a Party has been advised by legal counsel that disclosure of Confidential Information of the other Party is required to be made under Law (including the requirements of a national securities exchange or another similar regulatory body) or pursuant to documents subpoena, civil investigative demand, interrogatories, requests for information, or other similar process, the Party required to disclose the Confidential Information shall (to the extent legally permitted) provide the other Party with prompt written notice of such request or demands or other similar process so that such other Party may seek an appropriate protective order or waive the disclosing Party’s compliance with the provisions of this Section. In the absence of a protective order or waiver or other remedy, the Party required to disclose the other Party’s Confidential Information may disclose only that portion of the Confidential Information that its legal counsel advises it is legally required to disclose, provided that it exercises its commercially reasonable efforts to preserve the confidentiality of such other Party’s Confidential Information, at such other Party’s expense, including by cooperating with such other Party to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded the Confidential Information. On or after the Closing Date, the Purchased Assets and all Confidential Information related solely to the Purchased Assets (other than this Agreement or any Ancillary Agreement) shall be considered the Confidential Information of Buyer under this Section 11.1 and the obligations of this Section 11.1 shall apply to the Seller and not the Buyer; provided however, that to the extent such Confidential Information is also used by the Seller in the Retained Liabilities or Excluded Assets or in fulfilling obligations under this Agreement or any Ancillary Agreement, such Confidential Information shall constitute the Confidential Information of both Parties.

11.2The term “Confidential Information” as used in this Agreement means (a) as to Buyer, all confidential information exclusively relating to Buyer’s business, this Agreement and the Ancillary Agreements, and their respective terms, and the Purchased Assets and the Assumed Liabilities, or other business information provided by Buyer to Seller as contemplated by this Agreement or any Ancillary Agreement and (b) as to Seller, all confidential information relating to the business and operations of Seller, including this Agreement and its terms, and (except as otherwise provided in Section 11.1) the Excluded Assets and the Retained Liabilities or other obligations other than the Assumed Liabilities. The term “Confidential Information” does not include information that (i) becomes generally available to the public other than as a result of disclosure by the disclosing Party, (ii) becomes available to the disclosing Party on a non-confidential basis from a source other than the non-disclosing Party, provided that such source is not known by the disclosing Party to be bound by a confidentiality agreement with the non-disclosing Party, or (iii) other than information that comprises the Purchased Assets, was previously known by the non-disclosing Party as evidenced by the non-disclosing Party’s written records.

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11.3Public Announcement. Neither Seller, Buyer nor any of their respective Affiliates shall issue any press release or make any public announcement with respect to this Agreement or any Ancillary Agreement and the transactions contemplated hereby or thereby without obtaining the prior written consent of the other Party, except as may be required by Law, including any federal or state securities law, upon the advice of legal counsel and only if the disclosing Party (a) provides the non-disclosing Party with an opportunity to first review the release or other public announcement, (b) consults with the non-disclosing Party (whether such Party is named in such publicity, news release or public announcement or not) at a reasonable time prior to its release to allow the non-disclosing Party to comment thereon and (c) after its release, shall provide the non-disclosing Party with a copy thereof. If a Party, based on the advice of its legal counsel, determines that this Agreement or any Exhibits hereto must be filed with the United States Securities and Exchange Commission (“SEC”), then such Party, prior to making any such filing, shall provide the other Party and its legal counsel with a redacted version of this Agreement which it intends to file and any draft correspondence with the SEC requesting the confidential treatment by the SEC of those redacted sections of this Agreement, and will give due consideration to any timely comments provided by such other Party or its legal counsel and use reasonable efforts to ensure the confidential treatment by the SEC of those sections specified by such other Party or its legal counsel. Following the Closing, Buyer shall be entitled to make such public announcements as it deems appropriate related to Products; provided however that except as otherwise provided above, without Seller’s prior written consent, no such announcement shall contain any reference to this Agreement or any Ancillary Agreement or the terms set forth herein or therein or Seller, its Affiliates or actions taken with respect to Products prior to the Closing Date other than references materially consistent with those previously approved by Seller.

12.REGULATORY MATTERS.

12.1Transfer of ANDAs. Buyer and Seller shall use commercially reasonable efforts to effectuate the transfer of the ANDAs included in the Purchased Assets, at Buyer’s sole cost and expense, as of or as promptly as possible after the Closing Date, pursuant to the procedures for changing the ownership of an ANDA set forth at 21 C.F.R. § 314.72.

12.1.1Within five (5) Business Days after the Closing Date, Seller shall submit letter(s) to FDA in substantially the form set forth in Exhibit E. In its letter(s), Seller shall state the rights to the ANDAs included in the Purchased Assets have been transferred to Buyer. Within five (5) Business Days following the date that Seller notifies Buyer that Seller has submitted the letter(s) referenced above, Buyer shall submit letter(s) to FDA in substantially the form set forth in Exhibit E. In its letter(s), Buyer shall state: (a) its commitment to agreements, promises, and conditions made by Seller and contained in the ANDAs; (b) the date that the change in ownership is effective; and (c) a statement that the Buyer has a complete copy of the approved application, including supplements and records that are required to be kept pursuant to 21 C.F.R. § 314.81.

12.2Assumption of Regulatory Responsibilities. From and after the Closing Date, Buyer, at its sole cost and expense, shall be solely responsible and liable for taking all actions, paying all fees and conducting all communications with FDA (except with respect to the Seller letter to FDA referenced in Section 12.1.1) or other Governmental Entities as required by Law related to the ANDAs, including payment of any fees for periods after the Closing Date owed under Generic Drug User Fee Amendments of 2012 and preparing and filing all required reports (including adverse drug experience reports) with the appropriate Governmental Entity. Notwithstanding anything to the contrary in this Agreement, from and after the Closing Date, Seller shall continue to be responsible for compliance with Laws with respect to the sale and distribution of Products pursuant to Section 2.5 hereof.

12.3Supplementing ANDAs. From and after the Closing Date, Buyer shall (a) have sole responsibility for supplementing the ANDAs to include facilities designated by Buyer and (b) assume all responsibility for maintenance of the ANDAs. Promptly following the end of the Seller Distribution Term, Buyer shall delete Seller’s facilities referenced in the ANDAs. All decisions regarding the conduct of regulatory activities with respect to the ANDAs on or after the Closing Date shall be made by Buyer in its sole and absolute discretion, and all such regulatory activities shall be at its sole cost. Notwithstanding anything herein to the contrary, Buyer and its Affiliates shall not, directly or indirectly, take (or omit to take) any action that would or could reasonably be expected to have a material adverse effect on Seller’s ability to exercise its rights or comply with its on-going obligations under this Agreement or any Ancillary Agreement.

16

12.4Seller’s NDC Numbers. Buyer and its Affiliates shall not sell any Products under Seller’s or its Affiliates’ names or NDC numbers.

12.5Response to Medical Inquiries and Product Complaints. The terms of the Quality Agreement shall govern the Parties’ responsibilities for responding to any medical inquiries or complaints about any Product (including Product bearing Seller’s NDC numbers), which arose prior to, or arise on or after the Closing Date.

12.6Responsibility for Recalls, Withdrawals, and Field Corrections. The terms of the Quality Agreement shall govern the Parties’ responsibilities for recalls, withdrawals and field corrections.

13.TRANSFER TAXES. All transfer, sales, value added, stamp duty and similar Taxes payable in connection with the transaction contemplated hereby will be borne ** Buyer and Seller.

14.NON-COMPETE.

14.1Non-Compete. **.

14.2Equitable Relief. The Seller acknowledges that a breach or threatened breach of this Section 14 would give rise to irreparable harm to Buyer, for which monetary damages would not be an adequate remedy, and hereby agrees that in the event of a breach or a threatened breach by Seller of any such obligations, Buyer shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to equitable relief, including a temporary restraining order, an injunction, specific performance and any other relief that may be available from a court of competent jurisdiction (without any requirement to post bond). With respect to Seller, the Restricted Period will be extended by the duration of any breach by that Seller of his, her or its respective covenants in this Section 14.

14.3Reasonable Restrictions. Seller acknowledges that the restrictions contained in this Section 14 are reasonable and necessary to protect the legitimate interests of Buyer and constitute a material inducement to Buyer to enter into this Agreement and consummate the transactions contemplated by this Agreement. In the event that any covenant contained in this Section 14 should ever be adjudicated to exceed the time, geographic, product or service or other limitations permitted by Law in any jurisdiction, then any court is expressly empowered to reform such covenant, and such covenant shall be deemed reformed, in such jurisdiction to the maximum time, geographic, product or service or other limitations permitted by applicable Law. The covenants contained in this Section 14 and each provision of this Section 14 are severable and distinct covenants and provisions. The invalidity or unenforceability of any such covenant or provision as written shall not invalidate or render unenforceable the remaining covenants or provisions, and any such invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable such covenant or provision in any other jurisdiction.

^** This portion has been redacted pursuant to a confidential treatment request.

17

15.POST-CLOSING NEGOTATIONS.

15.1**. Following the Closing Date, the Parties shall use their commercially reasonable efforts to negotiate a commercially reasonable ** agreement between Buyer and Seller (or Seller’s Affiliates) **.

15.2**. Following the Closing date, upon the request of Buyer, Seller will discuss with Buyer in good faith to evaluate the feasibility of **. If such activities are deemed feasible by the Parties, Buyer and Seller will use their commercially reasonable efforts to negotiate a commercially reasonable ** contract.

16.FURTHER ASSURANCES; TECHNICAL TRANSFER ACTIVITIES.

16.1Delivery of Purchased Assets. Promptly following the Closing, but in no event later than thirty (30) Business Days after the Closing, Seller shall furnish the Buyer with copies of, and provide Buyer with ongoing access to, all Purchased Assets that are in tangible form and were not required to be delivered as of the Closing, except that: (a) Sample Products and all Raw Materials shall be transferred in accordance with Sections 16.1.1(a) and 16.1.1(b), respectively, of this Agreement and (b) Technical Transfer Documentation shall be transferred in accordance with Section 16.1.2 of this Agreement. The Seller agrees to work diligently and in good faith to complete the transfers set forth in this Section 16.1 from Seller to Buyer. Seller shall deliver the Data Room Materials to Buyer in electronic format prior to terminating Buyer’s access to the electronic data room.

16.1.1Transfer of Sample Products and Raw Materials. (a) Within thirty (30) Business Days after the Closing Date, Seller and/or its Affiliate shall transfer the Sample Products to Buyer’s and/or its Affiliate’s common carrier according to Ex Works (EXW) (Incoterms 2010) from the facility at which such Sample Products are located as of the date of such transfer; such common carrier to be specified by Buyer in writing at least seven (7) Business Days prior to the date that such transfer will occur; and (b) within thirty (30) Business Days after the Closing Date, Seller and/or its Affiliate shall transfer the Raw Materials to Buyer’s and/or its Affiliate’s common carrier according to Ex Works (EXW) (Incoterms 2010) from the facility at which such Raw Materials are located as of the date of such transfer; such common carrier to be specified by Buyer in writing at least seven (7) Business Days prior to the date that such transfer will occur (Buyer acknowledges that Raw Materials are located a different facilities).

16.1.2Transfer of Certain Portions of the Technical Transfer Documentation. Seller and/or its Affiliate shall use commercially reasonable efforts to transfer the Technical Transfer Documentation that is readily available and within Seller’s and/or its Affiliate’s possession as of the Closing Date, in electronic format (to the extent available in such format), to Buyer within thirty (30) Business Days after the Closing Date.

16.2Further Assurances. Following the Closing, each of the Parties shall, and shall cause their respective Affiliates to, execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement and the Ancillary Agreements.

^** This portion has been redacted pursuant to a confidential treatment request.

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17.MISCELLANEOUS.

17.1Arbitration. Any disputes arising out of or in connection with this Agreement shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by three arbitrators appointed in accordance with the rules. The legal place of arbitration shall be New York, NY, USA. The language of the arbitration shall be English.

17.2Governing Law; English Language. This Agreement shall be governed, interpreted and construed in accordance with the substantive laws of the State of Delaware, U.S.A., without regard to its conflict of laws principles. To the extent that it may otherwise by applicable, the Parties hereby expressly agree to unconditionally waive and exclude from the operation of this Agreement the United Nations Convention on Contracts for the International Sale of Goods, concluded at Vienna, on 11 April 1980, as amended and as may be amended further from time to time. This Agreement has been negotiated and drafted by the Parties in the English language. Any translation into any other language shall not be an official version thereof. In the event any translation of this Agreement is prepared for convenience or for any other purpose, the provisions of the English version shall prevail.

17.3Notices. All notices and other communications required or permitted to be given or made pursuant to this Agreement shall be in writing signed by the sender and shall be deemed duly given (a) on the date delivered, if personally delivered, (b) on the date sent by telecopier with automatic confirmation by the transmitting machine showing the proper number of pages were transmitted without error, (c) on the Business Day after being sent by Federal Express or another recognized overnight mail service which utilizes a written form of receipt for next day or next Business Day delivery or (d) three (3) Business Days after mailing, if mailed by U.S. postage-prepaid certified or registered mail, return receipt requested, in each case addressed to the applicable Party at the address set forth below; provided that a Party may change its address for receiving notice by the proper giving of notice hereunder:

if to Seller, to:

Sandoz Inc.

100 College Road West

Princeton, New Jersey 08540

Attention: President

With a copy (which shall not constitute notice) to:

Sandoz Inc.

100 College Road West

Princeton, New Jersey 08540

Attention: General Counsel

if to Buyer, to:

CASI Pharmaceuticals, Inc.

9620 Medical Center Drive #300

Rockville, Maryland 20850

Attention: Chief Executive Officer

With a copy (which shall not constitute notice) to:

CASI Pharmaceuticals, Inc.

9620 Medical Center Drive #300

Rockville, Maryland 20850

Attention: General Counsel

19

17.4Relationship of Parties. The status of the Parties under this Agreement shall be that of independent contractors, without the authority to act on behalf of or bind each other. Nothing in this Agreement shall be construed as establishing a partnership or joint venture relationship between the Parties hereto.

17.5Entire Agreement; Amendment. This Agreement and the Ancillary Agreements (and all Exhibits and Schedules attached hereto and thereto) supersede all prior discussions and agreements among the Parties with respect to the subject matter hereof and contains the sole and entire agreement among the Parties hereto with respect to the subject matter hereof. This Agreement may not be amended or modified except in writing executed by the duly authorized representatives of the Parties.

17.6No Third-Party Beneficiaries. Except as specifically provided herein, this Agreement is not intended to confer upon any Person other than the Parties hereto any rights or remedies hereunder.

17.7Severability. Should any part or provision of this Agreement be held unenforceable or in conflict with Law, the invalid or unenforceable part or provision shall, provided that it does not affect the essence of this Agreement, be replaced with a revision which accomplishes, to the greatest extent possible, the original commercial purpose of such part or provision in a valid and enforceable manner, and the balance of this Agreement shall remain in full force and effect and binding upon the Parties hereto.

17.8Assignment. The terms and provisions hereof shall inure to the benefit of, and be binding upon the Parties and their respective successors and permitted assigns. No Party shall assign, encumber or otherwise transfer this Agreement or any part of it to any Third Party, without the prior written consent of the other Party which consent will not be unreasonably withheld; provided, however, that notwithstanding the foregoing, no such consent shall be required in the event of any assignment or transfer of this Agreement (a) **, or (b) by either Party, to any successor in interest to such Party’s business, whether by merger, sale of assets or otherwise; in the event of which a Party shall only be required to give written notice of such assignment or transfer to the other Party but will not be required to obtain the consent of the other Party. In the case of any sale, assignment, divestiture or other transfer, the assigning Party shall remain liable for the full and timely performance of the transferee

17.9Waiver. No waiver of a breach or default hereunder shall be considered valid unless in writing and signed by the Party giving such waiver, and no such waiver shall be deemed a waiver of any subsequent breach or default of the same or similar nature.

17.10Survival. Any provision which by its terms is intended to survive the termination or expiration of this Agreement will survive the termination or expiration of this Agreement and remain in full force and effect thereafter.

17.11Interpretation. For purposes of this Agreement, (a) the words “include,” “includes” and “including” shall be deemed to be followed by the words “without limitation,” (b) the word “or” is not exclusive and (c) the words “herein,” “hereof,” “hereby,” “hereto” and “hereunder” refer to this Agreement as a whole. Unless the context otherwise requires, references herein: (i) to clauses or annexes mean the clauses of, and annexes to, this Agreement, (ii) to an agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof, and (iii) to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated thereunder. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the Party drafting an instrument or causing any instrument to be drafted. The annexes referred to herein shall be construed with, and be an integral part of, this Agreement to the same extent as if they were set forth herein.

^** This portion has been redacted pursuant to a confidential treatment request.

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17.12Counterparts; PDF. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original but all of which, taken together, shall constitute one and the same instrument. PDF and facsimile signatures shall constitute original signatures. The Parties agree that the electronic signatures appearing on this Agreement are the same as handwritten signatures for the purposes of validity, enforceability and admissibility pursuant to the Electronic Signatures in Global and National Commerce (ESIGN) Act of 2000, and Uniform Electronic Transactions Act (UETA) model law, or similar applicable laws.

17.13WAIVER OF CONSEQUENTIAL DAMAGES. IN NO EVENT SHALL EITHER PARTY OR ITS AFFILIATES HAVE ANY LIABILITY TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS) OF THE OTHER ARISING OUT OF THE PERFORMANCE OR FAILURE TO PERFORM ANY OBLIGATIONS SET FORTH HEREIN, IRRESPECTIVE OF WHETHER ATTRIBUTABLE TO BREACH OF CONTRACT, BREACH OF WARRANTY, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE, OTHER THAN WITH RESPECT TO INDEMNIFICATION CLAIMS PURSUANT TO SECTION 7 TO THE EXTENT PAYABLE TO THIRD PARTIES.

[Signature Page Follows]

21

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

CASI Pharmaceuticals, Inc.
By:	/s/ Ken K. Ren
	Dr. Ken K. Ren, Chief Executive Officer
SANDOZ INC.
By:	/s/ Peter Goldschmidt
Name:	Peter Goldschmidt
Title:	President, Sandoz US and Head of North America

[SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT]

EXHIBITS

Exhibit A	Bill of Sale
Exhibit B	Pharmacovigilance Agreement
Exhibit C	Quality Agreement
Exhibit D	Form of Assignment and Assumption Agreement for Intellectual Property Agreement(s)
Exhibit E	Forms of Seller and Buyer FDA Letters
Exhibit F	Transition Agreement
Exhibit G	Technical Transfer Documentation

Exhibit A

Bill of Sale

[See attached]

Bill of Sale

THIS BILL OF SALE (the “Bill of Sale”), dated as of January 26, 2018, is made and delivered by Sandoz Inc., a corporation organized under the laws of the State of Colorado (“Seller”), to CASI Pharmaceuticals, Inc., a Delaware corporation, with offices at 9620 Medical Center Drive, #300, Rockville, Maryland (“Buyer”), (each a “Party”, collectively the “Parties”).

WHEREAS, pursuant to that certain Asset Purchase Agreement, dated as of January 26, 2018, by and between Seller and Buyer (the “Asset Purchase Agreement”), Seller has agreed to transfer, sell, convey, assign and deliver to Buyer, and Buyer has agreed to purchase, accept and assume as of the date hereof, all right, title and interest of the Purchased Assets (as defined in the Asset Purchase Agreement); and

WHEREAS, the Parties desire to deliver to each other such instruments as are required in order to effectuate and evidence the sale by Seller and purchase by Buyer of the Purchased Assets.

NOW, THEREFORE, in consideration of the premises and in accordance with the provisions of the Asset Purchase Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Seller and Buyer hereby each agree as follows:

1. The terms of the Asset Purchase Agreement are incorporated herein by reference and capitalized terms used but not defined in this Bill of Sale shall have the meaning ascribed thereto in the Asset Purchase Agreement.

2. Seller hereby irrevocably and unconditionally transfers, sells, conveys, assigns, and delivers to Buyer, and Buyer hereby irrevocably and unconditionally purchases, accepts and assumes, all of Seller's right, title and interest in and to all of the Purchased Assets, free and clear of any Encumbrances.

3. The Buyer hereby assumes and agrees to pay, perform, and discharge all liabilities and obligations constituting the Assumed Liabilities.

4. All of the terms and provisions of this Bill of Sale shall be binding upon Seller and its successors and permitted assigns, and shall be binding upon Buyer and its successors and permitted assigns.

5. This Bill of Sale and any all matters arising directly or indirectly herefrom shall be governed by and construed and enforced in accordance with the laws of the State of Delaware applicable to agreements made and to be performed entirely in such State without regard to the conflict of laws principles thereof.

6. It is acknowledged and agreed that this Bill of Sale is intended to document the sale and assignment of the Purchased Assets to Buyer.

7. This Bill of Sale may be executed by PDF and in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute a single instrument. The Parties agree that the electronic signatures appearing on this Bill of Sale are the same as handwritten signatures for the purposes of validity, enforceability and admissibility pursuant to the Electronic Signatures in Global and National Commerce (ESIGN) Act of 2000, and Uniform Electronic Transactions Act (UETA) model law, or similar Laws.

[Signature Page Follows]

IN WITNESS WHEREOF, the Parties hereto have executed this Bill of Sale as of the date first above written.

CASI Pharmaceuticals, Inc.

By:

Name:

Title:

SANDOZ INC.

By:

Name:

Title:

Exhibit B

Pharmacovigilance Agreement

[See attached]

Executive Version

Pharmacovigilance Agreement

between

Sandoz Inc.

100 College Road West

Princeton, New Jersey 08540

(“Sandoz”)

And

CASI Pharmaceuticals Inc.

9620 Medical Center Drive, Suite 300

Rockville, MD 20850 (“CASI”)

^{CASI / Sandoz Pharmacovigilance Agreement} Page 1 of 11

Table of Contents

1. PURPOSE	3
2 SCOPE	3
3 EFFECTIVE DATE AND REVIEW	3
4 RESPONSIBILITIES	4
5 DEFINITIONS	4
6 TRAINING	4
7 URGENT SAFETY ACTIONS	4
8 INTAKE AND EXCHANGE OF AE AND SPECIAL SITUATION INFORMATION	4
9 SAFETY REGULATORY REPORTS	5
10 AE REPORT PROCESSING AND FOLLOW-UP	5
11 LITERATURE REVIEW	5
12 SAFETY ISSUES/SIGNALS	5
13 RECONCILIATION AND CONFIRMATION OF RECEIPT	5
14 REGULATORY AUTHORITY INTERACTIONS	6
15 RISK EVALUATION AND MITIGATION STRATEGY (REMS)	6
16 SUMMARY OF RESPONSIBILITIES	6
17 Compliance with Pharmacovigilance Agreement Audits	6
18 SIGNATURES/DATES	8
APPENDIX I - List of Contacts	9
APPENDIX II – Product(s):	10

^{CASI / Sandoz Pharmacovigilance Agreement} Page 2 of 11

1. PURPOSE

Sandoz and CASI are parties to that certain Asset Purchase Agreement (as such agreement may be amended from time to time, the “APA”), executed on even date with this Pharmacovigilance Agreement (this “PVA”).

The purpose of this PVA is to describe the procedures and define the responsibilities that Sandoz and CASI will employ to ensure that AE (as defined in Section 5 below) notification and reporting requirements for the product(s) listed in Appendix II (the “Products”) meet applicable regulatory authority regulations set forth in 21 C.F.R. § 314.80 and guidelines. CASI, as marketing authorization holder in the USA, has certain pharmacovigilance (“PV”) obligations in order to meet applicable regulatory rules and guidelines. Sandoz and CASI may each be referred to herein as a “Party” and collectively as the “Parties”.

Except as otherwise set forth herein, CASI will take over all regulatory responsibilities for AE reporting with respect to the Products as of the Effective Date.

Except as otherwise set forth herein, Sandoz will no longer have any regulatory responsibilities for AE reporting with respect to the Products as of the Effective Date.

For a list of Product(s) see Appendix II. Both Parties must agree in writing on any updates to the list of Products.

The capitalized terms used in this PVA shall have the meanings as defined herein, and if not defined herein, as defined in the APA, as applicable.

2. SCOPE

This PVA applies to AE reporting requirements for the Products as per 21 C.F.R. § 314.80. The obligations in this PVA are an extension of and supplement to any AE reporting requirements for the Products set forth in the APA. In the event of a conflict between the terms of PVA and the APA, the terms of the PVA shall control in regards to AEs.

3. EFFECTIVE DATE AND REVIEW

This PVA shall become effective on the Closing Date (the “Effective Date”) and will automatically terminate upon the expiration of the Seller Distribution Term. No provision of this PVA may be amended or modified other than by a written document signed by an authorized representative of each Party.

Sandoz shall commit to forward AEs after execution of this PVA as per local regulations, i.e. forwarding of AEs when received by error on the tradename of another company who is marketing authorization holder for the Products.

If applicable regulatory requirements change, there is disagreement regarding the interpretation of any aspect of this PVA, and/or either Party requests a review of this PVA due to issues or conflicts involving legal or regulatory requirements, the Parties agree to review, and, if appropriate, amend and/or revise the terms of this PVA. Renegotiation/review shall be considered complete when the Parties execute a written amendment or addendum to this PVA.

^{CASI / Sandoz Pharmacovigilance Agreement} Page 3 of 11

4. RESPONSIBILITIES

The Parties agree to implement the necessary training, procedures and systems/processes for the timely and direct reporting of any AE or Special Situation (as defined in Section 5 below) reports made known to them, as set forth in this PVA.

The Parties also agree that persons performing the tasks described in this PVA are qualified to perform those tasks.

The Parties agree that data privacy must be maintained at all times in relation to the activities defined in this PVA.

5. DEFINITIONS

Adverse Event (“AE”) is any untoward medical occurrence in a patient or clinical-trial subject administered a medicinal Product and which does not necessarily have to have a causal relationship with this treatment. An AE can therefore be any unfavorable and unintended sign (e.g. an abnormal laboratory finding), symptom, or disease temporally associated with the use of a medicinal Product or device, whether or not considered related to such medicinal Product or device.

“Special Situations”: In addition, for the purposes of this PVA, Special Situations, such as reports of use during pregnancy (with or without outcome), use during lactation, dispensing errors, maladministration, accidental or occupational exposure, pediatric exposure, unexpected benefit, overdose, lack of efficacy, drug-drug interaction, withdrawal syndrome, drug dependence, misuse, abuse or addiction, transmission of infectious disease, disease progression or aggravation, off-label use, treatment noncompliance, withdrawal periods, environmental issues and use of counterfeit product shall be reported by Sandoz to CASI following the requirements of AE reporting even if no AE has occurred.

“Urgent Safety Action”: This refers to a Product recall, withdrawal, restriction, and/or field correction, including recalls, withdrawals, restrictions, and/or field corrections of such Product required by any Governmental Entity or voluntary recalls, withdrawals, restrictions, and/or field corrections of such Product.

6. TRAINING

Each Party shall ensure that all each Party’s personnel involved with carrying out the terms of the PVA are trained appropriately. Training documentation will be maintained by each Party.

7. URGENT SAFETY ACTIONS

Urgent Safety Actions will be handled in accordance with the terms set forth in the APA and the Quality Agreement.

8. INTAKE AND EXCHANGE OF AE AND SPECIAL SITUATION INFORMATION

In the event that Sandoz learns of any AEs, Product complaints, or Special Situations for the Products, Sandoz will record all available AE, Product complaint, or Special Situation information on an intake form and e-mail the completed form to CASI via e-mail with read receipt as soon as possible but no later than five (5) calendar days of receipt. Sandoz will provide to CASI all information provided to Sandoz relating to the AE, Product complaint, or Special Situation but minimally, the following information will be provided:

^{CASI / Sandoz Pharmacovigilance Agreement} Page 4 of 11

· Date that Sandoz was notified of the AE, Product complaint, or Special Situation;

· Name and contact details of the reporter;

· Name of the Product;

· Nature of the AE, Product complaint, or Special Situation; and

· Patient details (if available).

The contacts for each Party are identified in Appendix I. Either Party may change its contact persons and/or its primary liaison upon immediate notification to the other Party in writing.

Sandoz Patient Safety will send a PDF copy of the original AE source document received by Sandoz Patient Safety, and it will be send to CASI via e-mail at the e-mail address listed in Appendix I. Both Sandoz and CASI will agree to maintain records of all safety information that has been exchanged for the purpose of future audits and/or inspections by FDA and/or regulatory authority, and in accordance with compliance with this PVA. All exchanged safety information records will be maintained for a period of no less than 10 years.

9. SAFETY REGULATORY REPORTS

CASI will hold and maintain the global safety database for all AEs occurring with Products reported to either Party. CASI is responsible for the preparation and submission of all safety reports, and including all ICSRs (15-day reports) as well as all aggregate reports (PADERs) in accordance with regulatory requirements.

10. AE REPORT PROCESSING AND FOLLOW-UP

CASI is responsible for processing AE reports including performing database entry/assessment, completing medical review, and performing any follow-up, as required.

11. LITERATURE REVIEW

CASI is responsible for performing review of the worldwide scientific literature for AE information related to Products in accordance with its procedures.

12. SAFETY ISSUES/SIGNALS

CASI is responsible for identifying safety issues or signals relating to Products and communicating safety issues to appropriate regulatory authorities.

13. RECONCILIATION AND CONFIRMATION OF RECEIPT

CASI will respond back to Sandoz for each AE report communicated to CASI, preferably within forty-eight (48) hours, but no later than two (2) Business Days after receipt by CASI. If Sandoz does not receive a response back within the above stated timeframe, Sandoz will continue to communicate the AE report until confirmation is received.

Sandoz shall provide cumulative reconciliation information during the Term of this PVA in accordance with Section 3 hereof. Sandoz and CASI will effectively perform a monthly reconciliation to ensure that all forwarded reports of all safety information have been successfully exchanged between both companies.

^{CASI / Sandoz Pharmacovigilance Agreement} Page 5 of 11

14. REGULATORY AUTHORITY INTERACTIONS

CASI is responsible for completing and reporting of AE reports for Products and for submission to regulatory/competent authorities. This includes individual case 15-Day Alert Reports and Periodic Safety Reports or Periodic Safety Update Reports, if applicable.

Communications with FDA relating to PV issues for the Products will be the responsibility of CASI.

15. RISK EVALUATION AND MITIGATION STRATEGY (REMS)

If a local REMS or other risk management activity is required for Products by a regulatory authority, CASI shall be responsible for the authorship, submission and administration of the program.

16. SUMMARY OF RESPONSIBILITIES

Responsibilities are summarized below.

Activity	CASI	Sandoz
Receipt of AE Reports	**	**
Email Transfer of AEs, Product complaints, and Special Situations	**	**
AE Processing (Data entry, evaluation, assessment, follow-up)	**	**
Safety Report Preparation and Submission	**	**
Signal Identification	**	**
Literature Review	**	**
Regulatory Reporting Related to AEs	**	**
Interactions with Regulatory Authorities Related to AEs	**	**
Immediate Confirmation of Receipt	**	**
Reconciliation Listing	**	**
Perform Reconciliation Against Database	**	**
Risk Management Plans	**	**

17. Compliance with Pharmcovigilance Agreement Audits

The Parties shall communicate urgent or critical issues affecting the other Party’s pharmacovigilance system in relation to meeting the obligations set forth in this PVA - within ** Business Days of discovery or receipt of documented findings cited during a regulatory authority inspection. Once corrective actions are determined, the inspected Party will provide a summary of the relevant inspection findings with associated corrective actions where the other Party is impacted.

^** This portion has been redacted pursuant to a confidential treatment request.

^{CASI / Sandoz Pharmacovigilance Agreement} Page 6 of 11

Either Party may audit the other Party’s pharmacovigilance systems/operations or contracted pharmacovigilance activities, giving ** days’ notice, to ensure that the elements set forth in this PVA are being fulfilled for the Product(s). As soon as the decision to audit is taken, all such audits will be notified by respective companies.

Audits must be reasonable in scope and in relationship to the Product and must take place during normal business hours. Parties will correct audit observations in a timely manner and communicate those actions to the other Party.

In the case of a serious suspected breach of compliance with this PVA, a directed audit will be performed by either party or an independent third party with notification only and a minimum of ** days. The possibility of a directed audit for serious breach is therefore agreed upon by way of execution of this agreement. 

Parties shall allow foreign and local health authorities to inspect their pharmacovigilance operations as it is necessary for either Party to maintain registration in the countries where the Product is marketed. The Parties shall allow foreign and local health authorities to inspect their pharmacovigilance operations as necessary for with Party to maintain a marketing authorization. The Parties shall inform each other of any local Product-specific pharmacovigilance inspections at the time they receive notification of the inspection.

^** This portion has been redacted pursuant to a confidential treatment request.

^{CASI / Sandoz Pharmacovigilance Agreement} Page 7 of 11

18. SIGNATURES/DATES

This PVA has been agreed upon by the following Parties.

Sandoz Inc.	CASI Pharmaceuticals, Inc.
Signature, Date	Signature, Date
**	**
**	**

^** This portion has been redacted pursuant to a confidential treatment request.

^{CASI / Sandoz Pharmacovigilance Agreement} Page 8 of 11

APPENDIX I - List of Contacts

Sandoz Inc.	CASI
	AEs; Product complaints, Product and Special Situations Requests: **
Primary Contact and AE specific Questions: **	Primary Contacts: ** **
Secondary Contact and AE specific Questions: **	Secondary Contact and AE specific Questions: ** **

^** This portion has been redacted pursuant to a confidential treatment request.

^{CASI / Sandoz Pharmacovigilance Agreement} Page 9 of 11

APPENDIX II – Product(s):

BENAZEPRIL 10MG 100FCT BO V1 US

 BENAZEPRIL 10MG 500FCT BO US

 BENAZEPRIL 20MG 100FCT BO V1 US

 BENAZEPRIL 20MG 500FCT BO US

 BENAZEPRIL 5MG 100FCT BO V1 US

 BENAZEPRIL 5MG 500FCT BO US

 BISOP FUM 10MG 100FCT BO US

 BISOP FUM 10MG 30FCT BO US

 BISOP FUM 5MG 100FCT BO US

 BISOP FUM 5MG 30FCT BO US

 CEFPROZIL 250MG 100FCT BO US

 CEFPROZIL 500MG 100FCT BO US

 CEFPROZIL 500MG 50FCT BO US

 CILOSTAZOL 100MG 500TAB BO US

 CILOSTAZOL 100MG 60TAB BO US

 CILOSTAZOL 50MG 60TAB BO US

 DICLOFENAC POT 50MG 100FCT BO US

 DICLOFENAC SOD 25MG 100GRT BO US

 DICLOFENAC SOD 50MG 60GRT BO US

 DICLOFENAC SOD 75MG 1000GRT BO US

 DICLOFENAC SOD 75MG 100GRT BO US

 DICLOFENAC SOD 75MG 500GRT BO US

 DICLOFENAC SOD 75MG 60GRT BO US

 ECONAZOLE NITRATE 1% 15G CRM US

 ECONAZOLE NITRATE 1% 30G CRM US

 ECONAZOLE NITRATE 1% 85G CRM US

 HEPARIN SOD 5000IU/1ML 10LIVI US

 LISINOPRIL 10MG 1000TAB BO V5 US

 LISINOPRIL 10MG 100TAB BO V4 US

 LISINOPRIL 2.5MG 1000TAB BO V2 US

 LISINOPRIL 2.5MG 100TAB BO V4 US

 LISINOPRIL 20MG 1000TAB BO V5 US

 LISINOPRIL 20MG 100TAB BO V4 US

 LISINOPRIL 30MG 100TAB BO V3 US

 LISINOPRIL 40MG 1000TAB BO V5 US

 LISINOPRIL 40MG 100TAB BO V3 US

 LISINOPRIL 5MG 1000TAB BO V2 US

 LISINOPRIL 5MG 1000TAB BO V5 US

 LISINOPRIL 5MG 100TAB BO V1 US

 LISINOPRIL 5MG 100TAB BO V3 US

 LISINOPRIL BPP 10MG 1000TAB BO V1 US

 LISINOPRIL BPP 10MG 100TAB BO V1 US

^{CASI / Sandoz Pharmacovigilance Agreement} Page 10 of 11

 LISINOPRIL BPP 20MG 1000TAB BO V1 US

 LISINOPRIL BPP 20MG 100TAB BO V1 US

 LISINOPRIL BPP 30MG 100TAB BO V1 US

 LISINOPRIL BPP 40MG 1000TAB BO V1 US

 LISINOPRIL BPP 40MG 100TAB BO V1 US

 LISINOPRIL BPP 5MG 1000TAB BO US

 LISINOPRIL BPP 5MG 100TAB BO US

 METHIMAZOLE 10MG 1000TAB BO US

 METHIMAZOLE 10MG 100TAB BO US

 METHIMAZOLE 5MG 1000TAB BO US

 METHIMAZOLE 5MG 100TAB BO US

 MIDODRINE 10MG 100TAB BO US

 MIDODRINE 2.5MG 100TAB BO US

 MIDODRINE 5MG 100TAB BO US

 MIDODRINE 5MG 500TAB BO US

 NABUMETONE 500MG 100FCT BO US

 NABUMETONE 500MG 500FCT BO US

 NABUMETONE 750MG 100FCT BO US

 NABUMETONE 750MG 500FCT BO US

 NARATRIPTAN 2.5MG 9FCT UD US

 ONDANSETRON HCL 4MG 30FCT BO US

 ONDANSETRON HCL 4MG 3FCT UD V1 US

 ONDANSETRON HCL 8MG 30FCT BO V1 US

 REPAGLINIDE 0.5MG 100TAB BO US

 REPAGLINIDE 1MG 100TAB BO US

 REPAGLINIDE 2MG 100TAB BO US

 RIBAVIRIN 200MG 56HGC BO US

 SPIRONOLACTONE 25MG 1000FCT BO US

 SPIRONOLACTONE 25MG 100FCT BO US

 SPIRONOLACTONE 25MG 500FCT BO US

 TIZANIDINE 2MG 1000TAB BO US

 TIZANIDINE 2MG 150TAB BO US

 TIZANIDINE 4MG 1000TAB BO US

 TIZANIDINE 4MG 150TAB BO US

 TIZANIDINE 4MG 300TAB BO US

 TRIAM/HCT 50+25MG 100HGC BO US

11

Exhibit C

Quality Agreement

[See attached]

Exhibit C to the Asset Purchase Agreement - Quality Agreement

This quality agreement (“Quality Agreement”) addresses key quality attributes not covered in that certain Asset Purchase Agreement dated January 26, 2018, by and between the Parties dated (the “APA”). This Quality Agreement shall become effective as of the Closing Date. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the APA. To the extent there is any conflict between the terms of this Quality Agreement and the terms of the APA, the terms of the Quality Agreement shall prevail with regard to quality issues. For all other matters, the terms of the APA shall prevail.

1.0 Introduction:

In accordance with the terms and conditions of the APA, CASI Pharmaceuticals, Inc. (“BUYER”) and Sandoz Inc. (“SANDOZ”) desire to allocate between themselves certain regulatory responsibilities for the Distribution Products (defined below) set forth on Exhibit A attached hereto during the Seller Distribution Term. SANDOZ (or its Affiliate) is the manufacturer and packager of the Distribution Products listed on Exhibit A of this Quality Agreement. Notwithstanding the foregoing, the regulatory requirements for the Distribution Products are maintained under the applicable regulatory filings for the Products purchased by BUYER under the terms of the APA. “Distribution Products” means the Products set forth on Exhibit A attached hereto that Seller will distribute after the Closing Date.

2.0 Current Good Manufacturing Practices (cGMP) and Applicable Law:

2.1 BUYER and SANDOZ agree that SANDOZ (or its Affiliate) shall manufacture all Distribution Products under a quality system that ensures the Distribution Products (i) are compliant with Law, including current good manufacturing practice (“cGMP”), and (ii) meet U.S. Food and Drug Administration (FDA)-approved product specifications.

3.0 GDUFA:

3.1 BUYER shall follow FDA Guidance on Self-Identification of Generic Drug Facilities, Sites, and Organizations and related fees as outlined in the Generic Drug User Fee Amendments (“GDUFA”) (if applicable).

4.0 Change Management and Approval:

4.1 SANDOZ and BUYER shall utilize a change control procedure in accordance with their respective standard operating procedure(s) (“SOP”) to ensure appropriate review of all manufacturing changes.

4.2 SANDOZ shall inform BUYER regarding major changes to a Distribution Product or process.

4.3 Changes in specifications of material resulting from the update of compendia and pharmacopoeia will be made by SANDOZ without BUYER’s prior approval, but SANDOZ shall notify BUYER regarding the same in writing within ** Business Days of such change(s).

5.0 Product Quality Review (PQR)/Annual Product Review (APR):

5.1 BUYER may request information in support of the PQR/APR. During the Term of this Quality Agreement, SANDOZ shall provide documentation to support the BUYER’s PQR/APR on an annual basis in accordance with cGMP requirements.

^** This portion has been redacted pursuant to a confidential treatment request.

Page 1 of 12

Exhibit C to the Asset Purchase Agreement - Quality Agreement

6.0 Batch Manufacturing and Packaging Records:

6.1 SANDOZ shall ensure that manufacturing and packaging of the Distribution Products is carried out in compliance with applicable Laws and according to approved manufacturing procedures and packaging instructions.

6.2 SANDOZ shall compile and archive clear structured batch documentation for each batch of the Distribution Products. The manufacturing batch records as well as testing documentation kept by SANDOZ shall comply with cGMP requirements.

6.3 SANDOZ shall ensure that, upon special requests from BUYER for applicable Regulatory Authorities, the following documents will be provided as copies within ** Business Days to BUYER:

· Complete manufacturing batch record of applicable bulk products,

· Certificate(s) of analysis of applicable APIs and of excipients,

· Certificate(s) of analysis of applicable primary packaging materials, and

· Test methods used.

7.0 Review of Batch Documentation:

7.1 After detailed review of the batch documentation of each batch by SANDOZ, SANDOZ shall ensure that a statement of compliance with cGMP (Certificate of Compliance (“CoC”), is included or attached to the certificate of analysis (“CoA”) that is signed by a qualified person.

7.2 The CoC shall include at a minimum the following: batch identification, name and address of SANDOZ, date of manufacturing/release/expiration, confirmation that the batch was manufactured/tested in compliance with cGMP requirements and per the registered manufacturing process, confirmation that the batch records for the batch have been reviewed and followed SANDOZ procedures and cGMP requirements and signature of certification.

8.0 Deviations, Corrective and Preventive Actions:

8.1 Deviation/failure investigations must be handled according to SANDOZ’s SOPs.

8.2 Critical or major deviations (or equivalent categories) that may have an impact on the release to the market decision or disrupt the supply shall be reported to BUYER prior to shipment.

9.0 Stability Testing:

9.1 SANDOZ is responsible for maintaining a follow-up stability program under ICH conditions or as required by legislation. SANDOZ will investigate any stability failures and notify BUYER within ** Business Days after discovery.

10.0 Distribution Product Complaints/Investigation Support:

10.1 Upon receipt of complaint, SANDOZ shall attempt to warm transfer Complaint Reports to BUYER at **. If warm transfer is not possible, Sandoz shall provide all available complaint report information via secure e-mail with acknowledgment from the BUYER required as soon as possible.

10.2 SANDOZ shall obtain appropriate contact information and event description regarding the complaint report and submit details of same to the BUYER via email at **, within ** Business Day of receipt by SANDOZ.

10.3 For any complaint requests, BUYER shall contact Sandoz via **. Upon request by BUYER, SANDOZ shall investigate complaints associated with the manufacturing of the Distribution Product. Within ** calendar days after receipt, SANDOZ shall supply BUYER with an approved investigation document. A more urgent time period for investigations will be met for complaints which may represent a significant safety issue, as determined by BUYER and/or SANDOZ.

^** This portion has been redacted pursuant to a confidential treatment request.

Page 2 of 12

Exhibit C to the Asset Purchase Agreement - Quality Agreement

11.0 Adverse Events:

11.1 Refer directly to the Pharmacovigilance Agreement (as defined in the APA).

12.0 Recall:

12.1 BUYER and SANDOZ will jointly agree on all decisions related to Distribution Product recalls, market withdrawals and field alerts concerning the finished Distribution Product. In the event that the Parties cannot agree, SANDOZ will decide on market action for SANDOZ labeled product. BUYER will be responsible for all associated Regulatory Authority notifications. SANDOZ shall be responsible for conducting, handling or processing recalls, withdrawals, and/or field corrections of and/or related to units of Distribution Products by SANDOZ based on safety, efficacy, failure to comply with cGMP, or similar concerns, with respect to any Distribution Products manufactured or distributed by SANDOZ during the Seller Distribution Term.

12.2 For any Product(s) sold by SANDOZ prior to the Closing Date, SANDOZ will be responsible for any recalls, market withdrawals and field alerts relating to such Product(s), and SANDOZ will be responsible for all associated Regulatory Authority notifications.

13.0 Warehouse:

13.1 SANDOZ shall, in compliance with Laws and per SANDOZ SOPs, ensure that starting materials and Distribution Products are stored under appropriate conditions of temperature and humidity, light and cleanliness so that identity, strength and purity are not affected. In the event that the quality of the materials/products in the warehouse could be adversely affected for any reason, SANDOZ shall take immediate action to prevent further damage. In any case, SANDOZ shall inform BUYER of such events and associated actions in writing within ** Business Days.

14.0 Packaging for Dispatch and Transport:

14.1 SANDOZ is responsible for compliance with applicable Laws and SOPs related to the packaging, preparation for shipment/transport, and the shipment/transport of the Distribution Products.

14.2 If deviations are identified during shipment/transport for which SANDOZ is responsible, SANDOZ shall generate deviation reports and submit to the BUYER, including remediation efforts.

15.0 Release of Distribution Product:

15.1 The final release of the Distribution Product to the market is the responsibility of SANDOZ per this Quality Agreement.

15.2 SANDOZ shall comply with applicable Laws, including but not limited to, the requirements set forth per the Drug Supply Chain Security Act (H.R. 3204).

^** This portion has been redacted pursuant to a confidential treatment request.

Page 3 of 12

Exhibit C to the Asset Purchase Agreement - Quality Agreement

16.0 Audit:

16.1 During the term of this Quality Agreement, and for a period of no more than ** year after the expiration date of the last batch the Distribution Products manufactured and sold by SANDOZ during the Seller Distribution Term, BUYER may audit SANDOZ for activities that SANDOZ performs under this Quality Agreement. Any such audit shall be conducted during regular business hours and at BUYER's cost. BUYER shall provide not less than ** days advance written notice of its desire to conduct an audit to SANDOZ. SANDOZ shall not unreasonably withhold approval of such an audit. Prior to any audit, BUYER shall provide an audit plan/scope, which shall be reviewed and agreed upon by SANDOZ and BUYER. Following critical events that impact product quality/safety, Recalls or adverse FDA inspection and/or observation, BUYER may audit SANDOZ for activities that SANDOZ performs under this Quality Agreement. Any such audit shall be conducted during regular business hours and at BUYER's cost. Both parties agree to work collaboratively, and in a timely fashion to schedule audit.

16.2 SANDOZ will allow on-site access to facilities, procedures, and other documentation, related to the manufacture of the Distribution Products (including to subcontractors involved in such activities, if any). Audits shall not include access to SANDOZ's electronic systems. Any information from electronic systems will be provided to BUYER during on-site audit.

17.0 Key Contacts:

17.1 The names of the persons at BUYER and SANDOZ who are responsible for matters relating to manufacture of Distribution Products are set forth in the table below. If changes are made pertaining to these key contacts, the Party making such change shall, in a timely manner, inform the other Party in writing.

^** This portion has been redacted pursuant to a confidential treatment request.

Page 4 of 12

Exhibit C to the Asset Purchase Agreement - Quality Agreement

Name/Title	Site	Telephone		e-mail
SANDOZ
**	**	**		**
**	**	**		**
**	**	**		**
**	**	**		**
**	**	**		**
**	**	**		**
**	**	**		**
**	**	**		**
BUYER
**	**	**	**
**	**	**	**
**	**	**	**
**	**	**	**

^** This portion has been redacted pursuant to a confidential treatment request.

Page 5 of 12

Exhibit C to the Asset Purchase Agreement - Quality Agreement

18.0 Terms of Expiry

18.1 This Quality Agreement shall expire upon expiration of the Seller Distribution Term.

19.0 Approvals:

SANDOZ INC.	BUYER
**
**
**
**
**
**
**
**

^** This portion has been redacted pursuant to a confidential treatment request.

Page 6 of 12

Exhibit C to the Asset Purchase Agreement - Quality Agreement

Exhibit A: List of Distribution Products^**

ANDA number	Product	ANDA Approval status	Strength	Seller to Distribute Product after Closing Date (Y/N)
	185005301 - BENAZEPRIL 10MG 100FCT BO V1 US	Approved	10 mg	**
	185005305 - BENAZEPRIL 10MG 500FCT BO US	Approved	10 mg	**
	185050501 - BENAZEPRIL 5MG 100FCT BO V1 US	Approved	5 mg	**
76402	185050505 - BENAZEPRIL 5MG 500FCT BO US	Approved	5 mg	**
	185082001 - BENAZEPRIL 20MG 100FCT BO V1 US	Approved	20 mg	**
	185082005 - BENAZEPRIL 20MG 500FCT BO US	Approved	20 mg	**
	185077101 - BISOP FUM 5MG 100FCT BO US	Approved	Tablet	**
75643	185077130 - BISOP FUM 5MG 30FCT BO US	Approved	Tablet	**
	185077401 - BISOP FUM 10MG 100FCT BO US	Approved	Tablet	**
	185077430 - BISOP FUM 10MG 30FCT BO US	Approved	Tablet	**
	970663 - CEFPROZIL 500MG 100FCT BO US	Approved	500 mg	**
65257	972156 - CEFPROZIL 500MG 50FCT BO US	Approved	500 mg	**
	972157 - CEFPROZIL 250MG 100FCT BO US	Approved	250 mg	**
	185012360 - CILOSTAZOL 50MG 60TAB BO US	Approved	50 mg	**
77310	185022305 - CILOSTAZOL 100MG 500TAB BO US	Approved	100 mg	**
	185022360 - CILOSTAZOL 100MG 60TAB BO US	Approved	100 mg	**
75229	501701 - DICLOFENAC POT 50MG 100FCT BO US	Approved	50 mg	**

^** This portion has been redacted pursuant to a confidential treatment request.

Page 7 of 12

Exhibit C to the Asset Purchase Agreement - Quality Agreement

74394	178501 - DICLOFENAC SOD 25MG 100GRT BO US	Approved	25 mg	**
74376	178901 - DICLOFENAC SOD 75MG 100GRT BO US	Approved	75 mg	**
74376	44014930 - DICLOFENAC SOD 50MG 60GRT BO US	Approved	50 mg	**
	44014932 - DICLOFENAC SOD 75MG 60GRT BO US	Approved	75 mg	**
74394	44014933 - DICLOFENAC SOD 75MG 500GRT BO US	Approved	75 mg	**
	44014934 - DICLOFENAC SOD 75MG 1000GRT BO US	Approved	75 mg	**
76075	44049874 - ECONAZOLE NITRATE 1% 15G CRM US	Approved	1%	**
	44049875 - ECONAZOLE NITRATE 1% 30G CRM US	Approved	1%	**
	44049876 - ECONAZOLE NITRATE 1% 85G CRM US	Approved	1%	**
91659	44063426 - HEPARIN SOD 5000IU/1ML 10LIVI US	Approved	5000 IU/mL	**

^** This portion has been redacted pursuant to a confidential treatment request.

Page 8 of 12

Exhibit C to the Asset Purchase Agreement - Quality Agreement

	44062559 - LISINOPRIL 10MG 1000TAB BO V5 US	Approved	10 mg	**
	44062579 - LISINOPRIL 20MG 1000TAB BO V5 US	Approved	20 mg	**
	44062580 - LISINOPRIL 2.5MG 1000TAB BO V2 US	Approved	2.5 mg	**
	44062581 - LISINOPRIL 20MG 100TAB BO V4 US	Approved	20 mg	**
	44062582 - LISINOPRIL 5MG 1000TAB BO V5 US	Approved	5 mg	**
	44062583 - LISINOPRIL 5MG 100TAB BO V3 US	Approved	5 mg	**
	44062584 - LISINOPRIL 2.5MG 100TAB BO V4 US	Approved	2.5 mg	**
	44062585 - LISINOPRIL 10MG 100TAB BO V4 US	Approved	10 mg	**
	44062590 - LISINOPRIL 40MG 1000TAB BO V5 US	Approved	40 mg	**
	44062592 - LISINOPRIL 30MG 100TAB BO V3 US	Approved	30 mg	**
75994	44062593 - LISINOPRIL 40MG 100TAB BO V3 US	Approved	40 mg	**
	185540001 - LISINOPRIL 5MG 100TAB BO V1 US	Approved	5 mg	**
	185540010 - LISINOPRIL 5MG 1000TAB BO V2 US	Approved	5 mg	**
	44057665 - LISINOPRIL BPP 5MG 100TAB BO US	Approved	5 mg	**
	44057666 - LISINOPRIL BPP 5MG 1000TAB BO US	Approved	5 mg	**
	44066630 - LISINOPRIL BPP 40MG 1000TAB BO V1 US	Approved	40 mg	**
	44066631 - LISINOPRIL BPP 10MG 100TAB BO V1 US	Approved	10 mg	**
	44066632 - LISINOPRIL BPP 30MG 100TAB BO V1 US	Approved	30 mg	**
	44066633 - LISINOPRIL BPP 20MG 1000TAB BO V1 US	Approved	20 mg	**
	44066634 - LISINOPRIL BPP 10MG 1000TAB BO V1 US	Approved	10 mg	**
	44066635 - LISINOPRIL BPP 20MG 100TAB BO V1 US	Approved	20 mg	**
	44066638 - LISINOPRIL BPP 40MG 100TAB BO V1 US	Approved	40 mg	**

^** This portion has been redacted pursuant to a confidential treatment request.

Page 9 of 12

Exhibit C to the Asset Purchase Agreement - Quality Agreement

	185020501 - METHIMAZOLE 5MG 100TAB BO US	Approved	5 mg	**
	185020510 - METHIMAZOLE 5MG 1000TAB BO US	Approved	5 mg	**
40411	185021001 - METHIMAZOLE 10MG 100TAB BO US	Approved	5 mg	**
	185021010 - METHIMAZOLE 10MG 1000TAB BO US	Approved	5 mg	**
	185004001 - MIDODRINE 2.5MG 100TAB BO US	Approved	2.5 mg	**
76514	185004301 - MIDODRINE 5MG 100TAB BO US	Approved	5 mg	**
	185004305 - MIDODRINE 5MG 500TAB BO US	Approved	5 mg	**
	185014901 - MIDODRINE 10MG 100TAB BO US	Approved	10 mg	**
	185014501 - NABUMETONE 500MG 100FCT BO US	Approved	500 mg	**
75280	185014505 - NABUMETONE 500MG 500FCT BO US	Approved	500 mg	**
	185014601 - NABUMETONE 750MG 100FCT BO US	Approved	750 mg	**
	185014605 - NABUMETONE 750MG 500FCT BO US	Approved	750 mg	**

^** This portion has been redacted pursuant to a confidential treatment request.

Page 10 of 12

Exhibit C to the Asset Purchase Agreement - Quality Agreement

90288	44021447 - NARATRIPTAN 2.5MG 9FCT UD US	Approved	1 mg  & 2.5 mg	**
	167931 - ONDANSETRON HCL 4MG 30FCT BO US	Approved	4 mg	**
77517	168131 - ONDANSETRON HCL 8MG 30FCT BO V1 US	Approved	8 mg	**
	44013938 - ONDANSETRON HCL 4MG 3FCT UD V1 US	Approved	4 mg	**
	44014642 - REPAGLINIDE 0.5MG 100TAB BO US	Approved	0.5 mg	**
78555	44014643 - REPAGLINIDE 1MG 100TAB BO US	Approved	1 mg	**
	44014644 - REPAGLINIDE 2MG 100TAB BO US	Approved	2 mg	**
76192	204316 - RIBAVIRIN 200MG 56HGC BO US	Approved	200 mg	**
	159901 - SPIRONOLACTONE 25MG 100FCT BO US	Approved	25 mg	**
86809	159905 - SPIRONOLACTONE 25MG 500FCT BO US	Approved	25 mg	**
	159910 - SPIRONOLACTONE 25MG 1000FCT BO US	Approved	25 mg	**
	185003410 - TIZANIDINE 2MG 1000TAB BO US	Approved	2 mg	**
	185003451 - TIZANIDINE 2MG 150TAB BO US	Approved	2 mg	**
76280	185440010 - TIZANIDINE 4MG 1000TAB BO US	Approved	4 mg	**
	185440023 - TIZANIDINE 4MG 300TAB BO US	Approved	4 mg	**
	185440051 - TIZANIDINE 4MG 150TAB BO US	Approved	4 mg	**
73191	271501 - TRIAM/HCT 50+25MG 100HGC BO US	Approved	50/25 mg	**
203489	Telmisartan and Hydrochlorothiazide Tabs	Pending	40 mg/12.5 mg - NDC 0781-5391-64 in unit dose pack of 30 tablets (3 x 10 unit-dose)	**
			80 mg/12.5 mg - NDC 0781-5392-64 in unit dose pack of 30 tablets (3 x 10 unit-dose)
			80 mg/25 mg - NDC 0781-5393-64 in unit dose pack of 30 tablets (3 x 10 unit-dose)
78611	Aripiprazole Tablets, 5 mg, 10 mg, 15 mg, 20 mg and 30 mg	Pending	5 mg, 10 mg, 15 mg, 20 mg and 30 mg	**
206080	Bepotastine Oph Solution 1.5%	Tentatively Approved.  PIII till September 2024	1.50%	**

^** This portion has been redacted pursuant to a confidential treatment request.

Page 11 of 12

Exhibit C to the Asset Purchase Agreement - Quality Agreement

204028	Desvenlafaxine	Approved	100 mg:  30, 90, 1000	**
206672	Entecavir Tablets  0.5 mg and 1 mg	Approved	0.5 mg and 1 mg	**
203746	Bromfenac Oph Solution, 0.09%	Pending	0.09%	**
203384	Epinastine HCl Ophthalmic  Solution,  0.05%	Approved	0.05%	**
90279	Burprenorphine HCL SLT	Approved		**

^** This portion has been redacted pursuant to a confidential treatment request.

Page 12 of 12

Exhibit C to the Asset Purchase Agreement - Quality Agreement

Exhibit D

Form of Assignment and Assumption Agreement for Intellectual Property Agreement(s)

THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Assignment”) is made as of this ____ day of _____________, 201_ (the “Effective Date”), by and between Sandoz Inc., a Colorado corporation, with offices at 100 College Road West, Princeton, new Jersey 08540 (“Assignor”) and CASI Pharmaceuticals, Inc., a Delaware corporation, with offices at 9620 Medical Center Drive, #300, Rockville, Maryland 20850 (“Assignee”). Assignor and Assignee are each referred to individually as a “Party” and together as the “Parties.”

W I T N E S S E T H :

WHEREAS, on _______________, Assignor and ___________, entered into that certain ______________ (the “Agreement”);

WHEREAS, Assignor and Assignee are parties to that certain Asset Purchase Agreement, dated as of the 26th day of January, 2018 (the “APA”);

WHEREAS, Assignor desires to assign to Assignee, and Assignee desires to assume from Assignor, all of Assignor's rights, obligations, debts and liabilities under, or related to, the Agreement, with effect from the Effective Date on the terms of this Assignment.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and as more fully set forth in the APA and subject to the terms and conditions therein, Assignor and the Assignee intending to be legally bound, agree as follows:

1. Assignment.

a. Assignor hereby assigns and transfers absolutely to Assignee the Agreement and all of its: (i) rights under the Agreement; and (ii) obligations, debts and liabilities under, or related to, the Agreement (“Liabilities”) relating to periods on or after the Effective Date; and

b. Assignee shall enjoy all the rights and benefits of Assignor under the Agreement with effect from the Effective Date, and all references to Assignor in the Agreement shall be read and construed as references to Assignee.

2. Assumption. Assignee hereby accepts the assignment of the Agreement and all of Assignor’s rights under the Agreement, and with effect from the Effective Date, agrees to assume and discharge and perform when due all of Assignor’s Liabilities as if Assignee were, and had originally been, a party to the Agreement in place of Assignor.

3. Liabilities. Nothing in this Assignment shall be construed as: (a) requiring Assignee to observe, perform or discharge any obligation created by or arising under the Agreement falling due for performance, or which should have been performed, before the Effective Date; or (b) making Assignee liable for any liabilities, claims or demands arising in relation to the Agreement to the extent they have arisen or arise (whether before or after the Effective Date) as a result of, or otherwise relate to an act, omission, fact, matter, circumstance or event undertaken, occurring, in existence or arising before the Effective Date.

4. Successors and Assigns. The terms and provisions hereof shall inure to the benefit of, and be binding upon the Parties and their respective successors and permitted assigns. No Party shall assign, encumber or otherwise transfer this Assignment or any part of it to any Third Party, without the prior written consent of the other Party which consent will not be unreasonably withheld; provided, however, that notwithstanding the foregoing, no such consent shall be required in the event of any assignment or transfer of this Assignment (a) to any of its affiliates, or (b) to any successor in interest to such Party’s business, whether by merger, sale of assets or otherwise; in the event of which a Party shall only be required to give written notice of such assignment or transfer to the other Party but will not be required to obtain the consent of the other Party. In the case of any assignment or other transfer, the assigning Party shall remain liable for the full and timely performance of the transferee.

5. Severability. Should any part or provision of this Assignment be held unenforceable or in conflict with applicable law, the invalid or unenforceable part or provision shall, provided that it does not affect the essence of this Assignment, be replaced with a revision which accomplishes, to the greatest extent possible, the original commercial purpose of such part or provision in a valid and enforceable manner, and the balance of this Assignment shall remain in full force and effect and binding upon the Parties hereto.

6. Arbitration. Any disputes arising out of or in connection with this Assignment shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by three arbitrators appointed in accordance with the rules. The legal place of arbitration shall be New York, NY, USA. The language of the arbitration shall be English.

7. Governing Law; English Language. This Assignment shall be governed, interpreted and construed in accordance with the substantive laws of the State of Delaware, U.S.A., without regard to its conflict of laws principles. To the extent that it may otherwise be applicable, the Parties hereby expressly agree to unconditionally waive and exclude from the operation of this Agreement the United Nations Convention on Contracts for the International Sale of Goods, concluded at Vienna, on 11 April 1980, as amended and as may be amended further from time to time. This Assignment has been negotiated and drafted by the Parties in the English language. Any translation into any other language shall not be an official version thereof. In the event any translation of this Agreement is prepared for convenience or for any other purpose, the provisions of the English version shall prevail.

8. Counterparts; PDF. This Assignment may be executed in two (2) or more counterparts, each of which shall be deemed an original but all of which, taken together, shall constitute one and the same instrument. PDF and facsimile signatures shall constitute original signatures. The Parties agree that the electronic signatures appearing on this Assignment are the same as handwritten signatures for the purposes of validity, enforceability and admissibility pursuant to the Electronic Signatures in Global and National Commerce (ESIGN) Act of 2000, and Uniform Electronic Transactions Act (UETA) model law, or similar Applicable Laws.

13

IN WITNESS WHEREOF, the Parties hereto have executed this Assignment as of the Effective Date.

CASI Pharmaceuticals, Inc.

By:

Name:

Title:

SANDOZ INC.

By:

Name:

Title:

Exhibit E

Form of Seller FDA Letter

<DATE>

Office of Generic Drugs, HFD-600

Center for Drug Evaluation and Research

Food and Drug Administration

Document Control Room

7620 Standish Place

Rockville, MD 20855

TRANSFER OF OWNERSHIP

Divestiture

Reference: <PRODUCT NAME>

ANDA # <NUMBER>

In accordance with 21 CFR §314.72(a)(1), Sandoz Inc. hereby notifies the Agency that we are transferring ownership, including all rights to ANDA <NUMBER> for <PRODUCT NAME> to <COMPANY NAME> The change in ownership is effective as of <DATE> and all rights of ownership for the referenced ANDA have been transferred to:

<COMPANY NAME>

<CONTACT NAME>

<ADDRESS LINE 1>

<ADDRESS LINE 2>

<TELEPHONE>

<FAX>

<EMAIL>

This submission is being sent to the Agency through the Electronic Submissions Gateway (ESG). The submission is presented in electronic format and is comprised of approximately 1 megabyte.

This document contains trade secrets and/or confidential commercial information and is therefore exempt from disclosure under the Freedom of Information Act and FDA implementing regulations.

If there are any questions regarding the content of this submission, please contact <CONTACT NAME> at <TELEPHONE NUMBER>, or via facsimile at <NUMBER> or e-mail:<EMAIL ADDRESS>.

Sincerely,

<CONTACT INFORMATION>

Form of Buyer FDA Letter

Buyer ANDA Letter

<DATE>

Office of Generic Drugs, HFD-600
Center for Drug Evaluation and Research	Sequence: <NUMBER>
Food and Drug Administration
Document Control Room
7620 Standish Place
Rockville, MD 20855

- General Correspondence – Acceptance of Ownership -

Reference: ANDA <NUMBER>

<PRODUCT NAME>

Reference is made to Sandoz Inc.’s (“Sandoz”) approved Abbreviated New Drug Application for <PRODUCT NAME>.

Reference is also made to <COMPANY’S NAME> <DATE> Transfer of Ownership of ANDA <NUMBER> in which they notified the Agency that ownership has been transferred to <COMPANY NAME>.

In accordance with 21 CFR 314.72(a)(2) <COMPANY NAME> is notifying the Agency that on <DATE> <COMPANY NAME> became the owner of ANDA <NUMBER>. In addition, a complete copy of the application was received from <COMPANY> on <DATE>. Furthermore, <COMPANY> hereby commits to abide by the agreements, commitments, and conditions currently contained in the application. If changes do arise from the transfer Sandoz will submit these changes to the application, as applicable.

<COMPANY> contact information is as follows:

Name:

Title:

Address

Telephone Number:

Fax Number:

Email:

This correspondence is being submitted via the electronic submission gateway. The size of the submission is approximately 5 MB. This submission is virus free. The files were scanned for virus using McAfee Virus Scan Enterprise Version 8.5i.

This document contains trade secrets and/or confidential commercial information and is therefore exempt from disclosure under the Freedom of Information Act and FDA implementing regulations.

If there are any questions regarding the content of this submission, please contact <CONTACT NAME> at <TELEPHONE NUMBER>, or via facsimile at <NUMBER> or e-mail:<EMAIL ADDRESS>.

Sincerely,

<CONTACT INFORMATION>

Exhibit F

Transition Agreement

[See attached]

Executive Version

TRANSITION AGREEMENT

between

CASI Pharmaceuticals, Inc.

and

SANDOZ INC.

and

Dated as of January 26, 2018

TRANSITION AGREEMENT

This TRANSITION AGREEMENT (this “Agreement”) is made as of this 26th day of January, 2018, by and between Sandoz Inc., a Colorado corporation, with offices at 100 College Road West, Princeton, New Jersey 08540 (“Sandoz”), and CASI Pharmaceuticals, Inc., a Delaware corporation, with offices at 9620 Medical Center Drive, Rockville, MD 20850 (“Buyer”). Sandoz and Buyer are each referred to individually as a “Party” and together as the “Parties.”

RECITALS

WHEREAS, Sandoz and Buyer are parties to that certain Asset Purchase Agreement, dated even with the date hereof (as such agreement may be amended from time to time, the “APA”); and

WHEREAS, the APA provides that Sandoz shall provide Buyer with certain assistance, information and knowledge to effect a transfer of the Purchased Assets from Sandoz to Buyer, and that the Parties (or their Affiliates) will enter into this Agreement on the Closing Date to provide for additional transition assistance.

NOW, THEREFORE, in consideration of the foregoing and the covenants and agreements set forth below, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

1.       DEFINITIONS

The capitalized terms used in this Agreement shall have the meanings as defined below or, if not defined below, as defined in the APA:

“**” shall have the meaning ascribed to it in Section 2.1.

“Tech Transfer Services” shall have the meaning ascribed to it in Section 2.1.

“Term” shall have the meaning ascribed to it in Section 3.

2.       Services to be Performed

2.1 Tech Transfer Services. Sandoz shall use commercially reasonable efforts to cause appropriate employees and representatives to discuss Buyer’s inquiries and respond to Buyer’s written queries specifically relating to the Technical Transfer Documentation upon reasonable request during the Term (the “Tech Transfer Services”). Sandoz shall arrange for an in-person meeting at its ** manufacturing site (“**”) to answer questions about the Technical Transfer Documentation promptly after the closing at a time to be mutually agreed with Buyer, but not later than ** Business Days after the Closing Date.

2.2 Responsibilities. Sandoz shall perform the Tech Transfer Services in a ** manner, and in accordance with this Agreement and the standards that Sandoz would normally use to accomplish a similar objective under similar circumstances exercising reasonable business judgment. Sandoz shall devote that portion of Sandoz's business time, attention, skill and energy as may be reasonably necessary to support the Tech Transfer Services, but in no event shall Sandoz be required to devote more hours than the amounts listed in Section 4.1 below. Sandoz shall provide sufficiently skilled and experienced staff necessary to perform the Tech Transfer Services. Notwithstanding the foregoing, Buyer acknowledges that nothing in this Agreement shall require Sandoz to retain any specific personnel, or that shall limit or restrict the right of Sandoz to restructure or change its manufacturing operations.

^** This portion has been redacted pursuant to a confidential treatment request.

2

2.3 Coordination. Sandoz shall appoint one individual, to serve as the project manager overseeing the provision of Tech Transfer Services by Sandoz. Such project manager shall coordinate the collection of questions and requests for information from Buyer personnel, and shall ensure that such questions and requests for information are fully addressed by Sandoz personnel. Buyer agrees that all communications to Sandoz by Buyer must be made through such project manager. Sandoz in its sole discretion may from time to time designate a different individual to serve as such project manager.

3.       TERM

The term of this Agreement shall commence as of the date of this Agreement and, unless sooner terminated in accordance with this Agreement, shall continue for a period of: ** (the “Term”). Upon the effective date of termination of this Agreement, the obligations and liabilities of each Party to the other shall cease and terminate, and this Agreement shall be of no further force or effect, except as otherwise provided herein.

4.       COMPENSATION

During the Term, in addition to the meeting referenced in the last sentence of Section 2.1, Sandoz shall perform not more than ** of Tech Transfer Services, not to exceed **, as reasonably requested by Buyer. **. Sandoz shall submit to Buyer an invoice within ** Business Days of the end of each month of this Agreement setting forth in reasonable detail all hours worked by each individual providing such Tech Transfer Services to Buyer and a description of the services performed by such individual.

5.       EXPENSES.

Buyer shall reimburse Sandoz for all reasonable out-of-pocket expenses, subject to any required approvals pursuant to the next sentence, incurred by Sandoz in rendering the Tech Transfer Services (collectively, the “Expenses”). All Expenses exceeding ** per month in the aggregate or ** individually shall require the prior written approval of Buyer in order to be reimbursed. All reimbursement requests for out-of-pocket Expenses shall be submitted not later than ** days after the expiration of the Term, together with copies of such supporting documentation as may be reasonably requested by Buyer.

6.       Reserved

7.       ETHICAL CONDUCT AND COMPLIANCE WITH LAWS

Sandoz agrees to perform Sandoz’s responsibilities under this Agreement in accordance with the **. Sandoz shall comply with all laws, rules and regulations, whether federal, state or local, in the Territory, that are applicable to Sandoz providing Buyer the Tech Transfer Services.

8.       CONFLICTS

Each Party represents, warrants and covenants that it is not, and shall not become, a party to any contract or other agreement with any other Person that would interfere with or prevent such Party from complying with the terms and provisions of this Agreement.

^** This portion has been redacted pursuant to a confidential treatment request.

3

9.       STATUS OF SANDOZ

In rendering services pursuant to this Agreement, Sandoz shall be an independent contractor. As an independent contractor, Sandoz shall have no authority, express or implied, to commit or obligate Buyer in any manner whatsoever. Nothing contained in this Agreement shall be construed or applied to create a partnership or joint venture.

10.       TERMINATION

10.1       For Cause. **.

10.2       Without Cause. **.

10.3       Survival Upon Termination. The provisions of Sections 10 (Termination), 12 (Notices) and 13 (Miscellaneous) shall survive any termination of this Agreement.

10.4       Effect of Termination. Any termination of this Agreement shall not affect either Party’s rights or obligations with respect to payments of compensation, costs or expenses incurred or due for Tech Transfer Services performed prior to the date of termination.

11.       Reserved

12.       NOTICES

All notices and other communications required or permitted to be given or made pursuant to this Agreement shall be in writing signed by the sender and shall be deemed duly given (a) on the date delivered, if personally delivered, (b) on the date sent by telecopier with automatic confirmation by the transmitting machine showing the proper number of pages were transmitted without error, (c) on the Business Day after being sent by Federal Express or another recognized overnight mail service which utilizes a written form of receipt for next day or next Business Day delivery or (d) three (3) Business Days after mailing, if mailed by U.S. postage-prepaid certified or registered mail, return receipt requested, in each case addressed to the applicable Party at the address set forth below; provided that a Party may change its address for receiving notice by the proper giving of notice hereunder:

if to Seller, to:

Sandoz Inc.

100 College Road West

Princeton, New Jersey 08540

Attention: President

With a copy (which shall not constitute notice) to:

Sandoz Inc.

100 College Road West

Princeton, New Jersey 08540

Attention: General Counsel

^** This portion has been redacted pursuant to a confidential treatment request.

4

if to Buyer, to:

CASI Pharmaceuticals, Inc.

9620 Medical Center Drive #300

Rockville, Maryland 20850

Attention: Chief Executive Officer

With a copy (which shall not constitute notice) to:

CASI Pharmaceuticals, Inc.

9620 Medical Center Drive #300

Rockville, Maryland 20850

Attention: General Counsel

13.       MISCELLANEOUS

13.1       Governing Law and Jurisdiction. The laws of the State of Delaware shall govern the validity and construction of this Agreement and all rights and obligations of, and disputes between the Parties arising out of or related to this Agreement or the transactions contemplated by this Agreement, whether in contract, tort or otherwise, without regard to the principles of conflict of laws of the State of Delaware. The Parties submit to the jurisdiction of all state and federal courts sitting in the State of Delaware for all actions and proceedings arising out of or relating to this Agreement.

13.2       Taxes. ** shall be fully responsible for payment of all income taxes, social security taxes, and for any other taxes or payment which may be due and owing by ** as the result of fees or amounts paid to it by ** under this Agreement, and ** shall indemnify and hold harmless ** from and against any such tax or payment.

13.3       WAIVER OF RIGHT TO JURY TRIAL. BY EXECUTING THIS AGREEMENT, THE PARTIES KNOWINGLY AND WILLINGLY WAIVE ANY RIGHT THEY HAVE UNDER APPLICABLE LAW TO A TRIAL BY JURY IN ANY DISPUTE ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE ISSUES RAISED BY THAT DISPUTE.

13.4       Miscellaneous. This Agreement may be amended, waived, changed, modified or discharged only by an agreement in writing signed by all of the Parties. The terms and provisions hereof shall inure to the benefit of, and be binding upon the Parties and their respective successors and permitted assigns. No Party shall assign, encumber or otherwise transfer this Agreement or any part of it to any Third Party, without the prior written consent of the other Party which consent will not be unreasonably withheld; provided, however, that notwithstanding the foregoing, no such consent shall be required in the event of any assignment or transfer of this Agreement (a) by either Party to any of its Affiliates, or (b) by either Party, to any successor in interest to all or any part of such Party’s business, whether by merger, sale of assets or otherwise; in the event of which a Party shall only be required to give written notice of such assignment or transfer to the other Party but will not be required to obtain the consent of the other Party. In the case of any sale, assignment, divestiture or other transfer, the assigning Party shall remain liable for the full and timely performance of the transferee. This Agreement may be executed and delivered by facsimile signature or other electronic format and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. In the event that any section or any part of a section of this Agreement should be declared void, invalid, or unenforceable by any court of law, for any reason, such a determination shall not render void, invalid, or unenforceable any other section or any part of any other section of this Agreement and the remainder of this Agreement shall remain in full force and effect. No delay by or omission of any Party in exercising any right, power, privilege, or remedy shall impair such right, power, privilege, or remedy or be construed as a waiver thereof.

^** This portion has been redacted pursuant to a confidential treatment request.

5

[Signature Page Follows]

6

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above set forth.

CASI Pharmaceuticals, Inc.		SANDOZ INC.
By:		By:
Name:	**	Name:
Title:	**	Title:

^** This portion has been redacted pursuant to a confidential treatment request.

Exhibit G

Technical Transfer Documentation

Document Name	Description of Document
**	**
**	**
**	**
**	**
**	**
**	**
**	**
**	**
**	**
**	**
**	**
**	**
**	**
**	**
**	**
**	**
**	**
**	**

^** This portion has been redacted pursuant to a confidential treatment request.

SCHEDULES

Schedule 1.3	ANDAs
Schedule 1.4	API Provider and Excipient Vendor List
Schedule 1.44	Raw Materials
Schedule 1.48	Sample Product
Schedule 1.50	Seller’s Knowledge
Schedule 6.2.2.2	Settled, Dismissed, Pending or Threatened ANDA Infringement Claims
Schedule 6.2.3.1	Pending Legal Proceedings
Schedule 6.2.3.2	Prior Legal Proceedings
Schedule 6.2.5	Recalls

Schedule 1.3

ANDAs

ANDA number	Product	ANDA Approval status	Strength	Seller to Distribute Product after Closing Date (Y/N)
	185005301 - BENAZEPRIL 10MG 100FCT BO V1 US	Approved	10 mg	**
	185005305 - BENAZEPRIL 10MG 500FCT BO US	Approved	10 mg	**
	185050501 - BENAZEPRIL 5MG 100FCT BO V1 US	Approved	5 mg	**
76402	185050505 - BENAZEPRIL 5MG 500FCT BO US	Approved	5 mg	**
	185082001 - BENAZEPRIL 20MG 100FCT BO V1 US	Approved	20 mg	**
	185082005 - BENAZEPRIL 20MG 500FCT BO US	Approved	20 mg	**
	185077101 - BISOP FUM 5MG 100FCT BO US	Approved	Tablet	**
75643	185077130 - BISOP FUM 5MG 30FCT BO US	Approved	Tablet	**
	185077401 - BISOP FUM 10MG 100FCT BO US	Approved	Tablet	**
	185077430 - BISOP FUM 10MG 30FCT BO US	Approved	Tablet	**
	970663 - CEFPROZIL 500MG 100FCT BO US	Approved	500 mg	**
65257	972156 - CEFPROZIL 500MG 50FCT BO US	Approved	500 mg	**
	972157 - CEFPROZIL 250MG 100FCT BO US	Approved	250 mg	**
	185012360 - CILOSTAZOL 50MG 60TAB BO US	Approved	50 mg	**
77310	185022305 - CILOSTAZOL 100MG 500TAB BO US	Approved	100 mg	**
	185022360 - CILOSTAZOL 100MG 60TAB BO US	Approved	100 mg	**

^** This portion has been redacted pursuant to a confidential treatment request.

75229	501701 - DICLOFENAC POT 50MG 100FCT BO US	Approved	50 mg	**
74394	178501 - DICLOFENAC SOD 25MG 100GRT BO US	Approved	25 mg	**
74376	178901 - DICLOFENAC SOD 75MG 100GRT BO US	Approved	75 mg	**
74376	44014930 - DICLOFENAC SOD 50MG 60GRT BO US	Approved	50 mg	**
	44014932 - DICLOFENAC SOD 75MG 60GRT BO US	Approved	75 mg	**
74394	44014933 - DICLOFENAC SOD 75MG 500GRT BO US	Approved	75 mg	**
	44014934 - DICLOFENAC SOD 75MG 1000GRT BO US	Approved	75 mg	**
76075	44049874 - ECONAZOLE NITRATE 1% 15G CRM US	Approved	1%	**
	44049875 - ECONAZOLE NITRATE 1% 30G CRM US	Approved	1%	**
	44049876 - ECONAZOLE NITRATE 1% 85G CRM US	Approved	1%	**
91659	44063426 - HEPARIN SOD 5000IU/1ML 10LIVI US	Approved	5000 IU/mL	**

^** This portion has been redacted pursuant to a confidential treatment request.

	44062559 - LISINOPRIL 10MG 1000TAB BO V5 US	Approved	10 mg	**
	44062579 - LISINOPRIL 20MG 1000TAB BO V5 US	Approved	20 mg	**
	44062580 - LISINOPRIL 2.5MG 1000TAB BO V2 US	Approved	2.5 mg	**
	44062581 - LISINOPRIL 20MG 100TAB BO V4 US	Approved	20 mg	**
	44062582 - LISINOPRIL 5MG 1000TAB BO V5 US	Approved	5 mg	**
	44062583 - LISINOPRIL 5MG 100TAB BO V3 US	Approved	5 mg	**
	44062584 - LISINOPRIL 2.5MG 100TAB BO V4 US	Approved	2.5 mg	**
	44062585 - LISINOPRIL 10MG 100TAB BO V4 US	Approved	10 mg	**
	44062590 - LISINOPRIL 40MG 1000TAB BO V5 US	Approved	40 mg	**
	44062592 - LISINOPRIL 30MG 100TAB BO V3 US	Approved	30 mg	**
75994	44062593 - LISINOPRIL 40MG 100TAB BO V3 US	Approved	40 mg	**
	185540001 - LISINOPRIL 5MG 100TAB BO V1 US	Approved	5 mg	**
	185540010 - LISINOPRIL 5MG 1000TAB BO V2 US	Approved	5 mg	**
	44057665 - LISINOPRIL BPP 5MG 100TAB BO US	Approved	5 mg	**
	44057666 - LISINOPRIL BPP 5MG 1000TAB BO US	Approved	5 mg	**
	44066630 - LISINOPRIL BPP 40MG 1000TAB BO V1 US	Approved	40 mg	**
	44066631 - LISINOPRIL BPP 10MG 100TAB BO V1 US	Approved	10 mg	**
	44066632 - LISINOPRIL BPP 30MG 100TAB BO V1 US	Approved	30 mg	**
	44066633 - LISINOPRIL BPP 20MG 1000TAB BO V1 US	Approved	20 mg	**
	44066634 - LISINOPRIL BPP 10MG 1000TAB BO V1 US	Approved	10 mg	**
	44066635 - LISINOPRIL BPP 20MG 100TAB BO V1 US	Approved	20 mg	**
	44066638 - LISINOPRIL BPP 40MG 100TAB BO V1 US	Approved	40 mg	**

^** This portion has been redacted pursuant to a confidential treatment request.

	185020501 - METHIMAZOLE 5MG 100TAB BO US	Approved	5 mg	**
	185020510 - METHIMAZOLE 5MG 1000TAB BO US	Approved	5 mg	**
40411	185021001 - METHIMAZOLE 10MG 100TAB BO US	Approved	5 mg	**
	185021010 - METHIMAZOLE 10MG 1000TAB BO US	Approved	5 mg	**
	185004001 - MIDODRINE 2.5MG 100TAB BO US	Approved	2.5 mg	**
76514	185004301 - MIDODRINE 5MG 100TAB BO US	Approved	5 mg	**
	185004305 - MIDODRINE 5MG 500TAB BO US	Approved	5 mg	**
	185014901 - MIDODRINE 10MG 100TAB BO US	Approved	10 mg	**
	185014501 - NABUMETONE 500MG 100FCT BO US	Approved	500 mg	**
75280	185014505 - NABUMETONE 500MG 500FCT BO US	Approved	500 mg	**
	185014601 - NABUMETONE 750MG 100FCT BO US	Approved	750 mg	**
	185014605 - NABUMETONE 750MG 500FCT BO US	Approved	750 mg	**

^** This portion has been redacted pursuant to a confidential treatment request.

90288	44021447 - NARATRIPTAN 2.5MG 9FCT UD US	Approved	1 mg  & 2.5 mg	**
	167931 - ONDANSETRON HCL 4MG 30FCT BO US	Approved	4 mg	**
77517	168131 - ONDANSETRON HCL 8MG 30FCT BO V1 US	Approved	8 mg	**
	44013938 - ONDANSETRON HCL 4MG 3FCT UD V1 US	Approved	4 mg	**
	44014642 - REPAGLINIDE 0.5MG 100TAB BO US	Approved	0.5 mg	**
78555	44014643 - REPAGLINIDE 1MG 100TAB BO US	Approved	1 mg	**
	44014644 - REPAGLINIDE 2MG 100TAB BO US	Approved	2 mg	**
76192	204316 - RIBAVIRIN 200MG 56HGC BO US	Approved	200 mg	**
	159901 - SPIRONOLACTONE 25MG 100FCT BO US	Approved	25 mg	**
86809	159905 - SPIRONOLACTONE 25MG 500FCT BO US	Approved	25 mg	**
	159910 - SPIRONOLACTONE 25MG 1000FCT BO US	Approved	25 mg	**

^** This portion has been redacted pursuant to a confidential treatment request.

	185003410 - TIZANIDINE 2MG 1000TAB BO US	Approved	2 mg	**
	185003451 - TIZANIDINE 2MG 150TAB BO US	Approved	2 mg	**
76280	185440010 - TIZANIDINE 4MG 1000TAB BO US	Approved	4 mg	**
	185440023 - TIZANIDINE 4MG 300TAB BO US	Approved	4 mg	**
	185440051 - TIZANIDINE 4MG 150TAB BO US	Approved	4 mg	**
73191	271501 - TRIAM/HCT 50+25MG 100HGC BO US	Approved	50/25 mg	**
203489	Telmisartan and Hydrochlorothiazide Tabs	Pending	40 mg/12.5 mg - NDC 0781-5391-64 in unit dose pack of 30 tablets (3 x 10 unit-dose)	**
			80 mg/12.5 mg - NDC 0781-5392-64 in unit dose pack of 30 tablets (3 x 10 unit-dose)
			80 mg/25 mg - NDC 0781-5393-64 in unit dose pack of 30 tablets (3 x 10 unit-dose)
78611	Aripiprazole Tablets, 5 mg, 10 mg, 15 mg, 20 mg and 30 mg	Pending	5 mg, 10 mg, 15 mg, 20 mg and 30 mg	**
206080	Bepotastine Oph Solution 1.5%	Tentatively Approved.  PIII till September 2024	1.50%	**
204028	Desvenlafaxine	Approved	100 mg:  30, 90, 1000	**
206672	Entecavir Tablets  0.5 mg and 1 mg	Approved	0.5 mg and 1 mg	**
203746	Bromfenac Oph Solution, 0.09%	Pending	0.09%	**
203384	Epinastine HCl Ophthalmic  Solution,  0.05%	Approved	0.05%	**
90279	Burprenorphine HCL SLT	Approved		**

^** This portion has been redacted pursuant to a confidential treatment request. 

Schedule 1.4

API Provider and Excipient Vendor List

Component Description	Component Manufacturer Name
**	**
**	**
**	**
**	**
**	**
**	**
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**	**
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**	**
**	**
**	**
**	**
**	**
**	**
**	**

^** This portion has been redacted pursuant to a confidential treatment request.

**	**
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^** This portion has been redacted pursuant to a confidential treatment request.

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^** This portion has been redacted pursuant to a confidential treatment request.

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^** This portion has been redacted pursuant to a confidential treatment request.

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^** This portion has been redacted pursuant to a confidential treatment request.

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^** This portion has been redacted pursuant to a confidential treatment request.

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^** This portion has been redacted pursuant to a confidential treatment request.

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^** This portion has been redacted pursuant to a confidential treatment request.

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^** This portion has been redacted pursuant to a confidential treatment request.

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^** This portion has been redacted pursuant to a confidential treatment request.

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^** This portion has been redacted pursuant to a confidential treatment request.

Schedule 1.44

Raw Materials

Material Description	QTY (KG)
**	**
**	**
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^** This portion has been redacted pursuant to a confidential treatment request.

Schedule 1.48

Sample Product

Material Description	Number of units in one case
BENAZEPRIL 10MG 100FCT BO V1 US	**
BENAZEPRIL 20MG 100FCT BO V1 US	**
BENAZEPRIL 5MG 100FCT BO V1 US	**
BISOP FUM 10MG 30FCT BO US	**
CEFPROZIL 250MG 100FCT BO US	**
CILOSTAZOL 100MG USP 60TAB BO US	**
CILOSTAZOL 50MG USP 60TAB BO US	**
DICLOFENAC POT 50MG 100FCT BO US	**
DICLOFENAC SOD 25MG 100GRT BO US	**
DICLOFENAC SOD 75MG 100GRT BO US	**
DICLOFENAC SOD 75MG 60GRT BO US	**
ECONAZOLE NITRATE 1% 15G CRM US	**
LISINOPRIL 10MG 100TAB BO V4 US	**
LISINOPRIL 2.5MG 1000TAB BO V2 US	**
LISINOPRIL 20MG 100TAB BO V4 US	**
LISINOPRIL 30MG 100TAB BO V3 US	**
LISINOPRIL 40MG 100TAB BO V3 US	**
LISINOPRIL 5MG 100TAB BO V3 US	**
LISINOPRIL BPP 10MG 100TAB BO V1 US	**
LISINOPRIL BPP 20MG 1000TAB BO V1 US	**
LISINOPRIL BPP 30MG 100TAB BO V1 US	**
LISINOPRIL BPP 40MG 1000TAB BO V1 US	**
METHIMAZOLE 10MG 1000TAB BO US	**
METHIMAZOLE 5MG 100TAB BO US	**
MIDODRINE USP 10MG 100TAB BO US	**
MIDODRINE USP 5MG 100TAB BO US	**
NABUMETONE 500MG 100FCT BO US	**
NABUMETONE 750MG 100FCT BO US	**
ONDANSETRON HCL 4MG 30FCT BO US	**
ONDANSETRON HCL 8MG 30FCT BO V1 US	**
REPAGLINIDE 2MG 100TAB BO US	**
SPIRONOLACTONE 25MG 1000FCT BO US	**
TIZANIDINE USP 2MG 1000TAB BO US	**
TIZANIDINE USP 4MG 300TAB BO US	**

^** This portion has been redacted pursuant to a confidential treatment request.

Schedule 1.50

Seller’s Knowledge

**

**

**

^** This portion has been redacted pursuant to a confidential treatment request.

Schedule 6.2.2.2

Settled, Dismissed, Pending or Threatened ANDA Infringement Claims

Aripiprazole (ANDA 78-611)

· 3:07-cv-01000-MLC-LHG Otsuka Pharmaceutical Co., Ltd. v. Sandoz, Inc. (D.N.J.)

· 1:15-cv-01716-JBS-KMW Otsuka Pharmaceutical Co., Ltd. v. Sandoz, Inc. (D.N.J.)

Bepotastine (1.5%) (ANDA 206080)

· 3:14-cv-01325-MAS-DEA Bausch & Lomb Inc. et al. v. Sandoz Inc. and Sandoz Int’l GMBH (D.N.J.)

Desvenlafaxine (ANDA 204028)

· 1:2012-cv-00814 (D.Del.) Pfizer Inc. et al. v. Sandoz Inc.

· 3:2012-cv-03880 (D.N.J.) Pfizer Inc. et al. v. Sandoz Inc.

Ondansetron (ANDA 77-517)

· 2:05-cv-02497-JCL-MF Glaxo Group Ltd et al. v. Sandoz Inc. (D.N.J.)(filed 5/9/05)

Repaglinide (ANDA 78-555)

· 3:11-cv-06106-FLW Novo Nordisk Inc. et al. v. Sandoz Inc. (D.N.J.)

· 2:2011-cv-13594 Sandoz Inc. v. Novo Nordisk Inc. et al. (E.D.Mich.)

Ribavirin (ANDA 76-192)

· 2:02-cv-03544-MRP-FMO ICN Pharmaceutical, Inc. et al. v. Geneva Pharmaceuticals Technology Corp., et al. (C.D.Cal.)

· 2:02-cv-03543 ICN Pharmaceutical, Inc. et al. v. Geneva Pharmaceuticals Technology Corp., et al. (C.D.Cal.)

· Court of Appeals Federal Circuit (cafc) 04-1047

· 2:01-cv-04556-DMC Schering Corp. v. Geneva Pharmaceuticals Technology Corp. (D.N.J.)

· 2:02-cv-01564-DMC Schering Corp. v. Geneva Pharmaceuticals Technology Corp. (D.N.J.)

Schedule 6.2.3.1

Pending Legal Proceedings

Benazepril HCTZ tablets (10-12.5mg, 20-12.5mg, 20-25mg) are subject of the civil antitrust price fixing cases consolidated under In re Generic Pharmaceuticals Pricing Antitrust Litigation, MDL No. 2724, No. 16-MD-2724-CMR (E.D. Pa.) (Hon. Cynthia M. Rufe).  The cases are: 

· In re Benazepril Actions (Direct Purchasers), 16-BZ-27241

· In re Benazepril Actions (End Payor Purchasers), 16-BZ-27242

· In re Benazepril Actions (Indirect Reseller Purchasers),  16-BZ-27243

Ondansetron is currently subject of industry-wide products liability litigation.  Approximately 376 cases have been consolidated in a multi-district litigation (“MDL”) under In re: Zofran (Ondansetron) Products Liability, MDL 2657 (D. Mass.) (Hon. F. Dennis Saylor).  In addition, there are approximately 15 cases pending in state courts.  Cases in which Sandoz Inc. was, is, or may be implicated are: 

· Valerie Maenza, et al. v. Sandoz Inc. and GlaxoSmithKline, LLC, No. 1:15-cv-13947-FDS (D. Mass.)

· Heather Perham, individually and on behalf of her minor child, X.M. v. GlaxoSmithKline, LLC, Sandoz, Inc., Sun Pharmaceuticals Industries, Ltd., No. 1:16-cv-10199-FDS (D. Mass.)

· Dawn M. Ramsey and Byron Rossberg v. GlaxoSmithKline, LLC., No. 1:16-cv-11980-FDS (D. Mass.)

· Jennifer London, individually and on behalf of and as representative for M.L. a deceased minor, and Charles London, individually v. GlaxoSmithKline and Sandoz Inc., No. 1:16-cv-12051-FDS (D. Mass.)

Schedule 6.2.3.2

Prior Legal Proceedings

Econazole Nitrate topical cream is subject of the civil antitrust price fixing cases consolidated under In re Generic Pharmaceuticals Pricing Antitrust Litigation, MDL No. 2724, No. 16-MD-2724-CMR (E.D. Pa.) (Hon. Cynthia M. Rufe).  The cases are:

· In re Econazole Cases (Lead Case), 16-EC-27240

· In re Econazole Cases (Direct Purchasers), 16-EC-27241

· In re Econazole Cases (End Payors), 16-EC-27242

· In re Econazole Cases (Indirect Reseller Purchasers), 16-EC-27243

Schedule 6.2.5

Recalls

Product Name	Lot Number	Recall Initiation Date	Status	Date of Recall Closure	Recall Class	Recall Level	Issue
**	**	**	**	**	**	**	**

^** This portion has been redacted pursuant to a confidential treatment request.

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statements of CASI Pharmaceuticals, Inc. on Forms S-8 (File Nos. 333-68048, 333-188042, 333-101617 and 333-222043) and Forms S-3 (File Nos. 333-80193, 333-84907, 333-76824, 333-104380, 333-110604, 333-122309, 333-133190, 333-132715, 333-151542, 333-167754, 333-182803, 333-200927, 333-214889, 333-222046, and 333-222701) of our report, dated March 29, 2018 on our audits of the consolidated financial statements of CASI Pharmaceuticals, Inc., as of December 31, 2017 and 2016 and for the years then ended, included in this Annual Report on Form 10-K of CASI Pharmaceuticals, Inc. for the year ended December 31, 2017.

/s/ CohnReznick LLP

Roseland, New Jersey

March 29, 2018

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Ken K. Ren, certify that:

1. I have reviewed this annual report on Form 10-K of CASI Pharmaceuticals, Inc.;

2. Based on my knowledge, this 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 report;

3. Based on my knowledge, the financial statements, and other financial information included in this 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 report;

4. The registrant’s other certifying officer 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 registrant, 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; and

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: March 29, 2018

/s/ Ken K. Ren

Ken K. Ren

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL ACCOUNTING OFFICER

I, Sara B. Capitelli, certify that:

1. I have reviewed this annual report on Form 10-K of CASI Pharmaceuticals, Inc.;

2. Based on my knowledge, this 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 report;

3. Based on my knowledge, the financial statements, and other financial information included in this 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 report;

4. The registrant’s other certifying officer 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 registrant, 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; and

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: March 29, 2018

/s/ Sara B. Capitelli

Sara B. Capitelli

Principal Accounting Officer

EX-32.1

Exhibit 32.1

CERTIFICATION BY CHIEF EXECUTIVE OFFICER
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 Annual Report of CASI Pharmaceuticals, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ken K. Ren, as Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company

This certificate is being made for the exclusive purpose of compliance by the Chief Executive Officer of the Company with the requirements of Section 906 of the Sarbanes-Oxley Act of 2002, and may not be used by any person or for any reason other than as specifically required by law.

	/s/ Ken K. Ren
March 29, 2018	Ken K. Ren
	Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION BY PRINCIPAL ACCOUNTING OFFICER
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 Annual Report of CASI Pharmaceuticals, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Sara B. Capitelli, as Vice President, Finance & Principal Accounting Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of’ the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company

This certificate is being made for the exclusive purpose of compliance by the Principal Accounting Officer of the Company with the requirements of Section 906 of the Sarbanes-Oxley Act of 2002, and may not be used by any person or for any reason other than as specifically required by law.

	/s/ Sara B. Capitelli
March 29, 2018	Sara B. Capitelli
	Principal Accounting Officer

XML

Document And Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2017	Mar. 28, 2018	Jun. 30, 2017
Document Information [Line Items]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	FY
Entity Registrant Name	CASI Pharmaceuticals, Inc.
Entity Central Index Key	0000895051
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float			$ 35,022,789
Trading Symbol	CASI
Entity Common Stock, Shares Outstanding		79,641,876

XML

Consolidated Balance Sheets - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 43,489,935	$ 27,092,928
Prepaid expenses and other	322,493	355,891
Total current assets	43,812,428	27,448,819
Property and equipment, net	1,046,514	229,591
Other assets	242,023	34,485
Total assets	45,100,965	27,712,895
Current liabilities:
Accounts payable	2,087,770	1,064,626
Payable to related party	2,228,366	0
Accrued liabilities	745,961	250,950
Total current liabilities	5,062,097	1,315,576
Note payable, net of discount	1,498,754	1,491,278
Contingent rights derivative liability	0	4,122,266
Total liabilities	6,560,851	6,929,120
Commitments and contingencies
Stockholders’ equity:
Convertible preferred stock, $1.00 par value; 5,000,000 shares authorized and 0 shares issued and outstanding at December 31, 2017 and 2016	0	0
Common stock, $.01 par value: 170,000,000 shares authorized at December 31, 2017 and 2016; 69,901,625 shares and 60,276,119 shares issued at December 31, 2017 and 2016, respectively	699,015	602,760
Additional paid-in capital	498,577,372	470,147,086
Treasury stock, at cost: 79,545 shares held at December 31, 2017 and 2016	(8,034,244)	(8,034,244)
Accumulated deficit	(452,702,029)	(441,931,827)
Total stockholders’ equity	38,540,114	20,783,775
Total liabilities and stockholders’ equity	$ 45,100,965	$ 27,712,895

XML

Consolidated Balance Sheets [Parenthetical] - $ / shares	Dec. 31, 2017	Dec. 31, 2016
Convertible preferred stock, par value (in dollars per share)	$ 1.00	$ 1.00
Convertible preferred stock, shares authorized	5,000,000	5,000,000
Convertible preferred stock, shares issued	0	0
Convertible preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	170,000,000	170,000,000
Common stock, shares issued	69,901,625	60,276,119
Treasury stock, shares held	79,545	79,545

XML

Consolidated Statements of Operations - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Revenues:
Product sales	$ 0	$ 0
Revenues Total	0	0
Costs and expenses:
Research and development	7,595,182	4,645,560
General and administrative	3,156,138	4,775,050
Costs and expenses	10,751,320	9,420,610
Interest (income) expense, net	(1,009)	26,090
Change in fair value of contingent rights	19,891	6,788
Net loss	$ (10,770,202)	$ (9,453,488)
Net loss per share (basic and diluted)	$ (0.18)	$ (0.17)
Weighted average number of shares outstanding (basic and diluted)	61,513,988	55,869,205

XML

Consolidated Statements of Stockholders’ Equity - USD ($)	Total	Preferred Stock [Member]	Common Stock [Member]	Treasury Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]
Balance at Dec. 31, 2015	$ (6,087,441)	$ 0	$ 325,252	$ (8,034,244)	$ 434,099,890	$ (432,478,339)
Balance (in Shares) at Dec. 31, 2015		0	32,445,811
Issuance of common stock and warrants pursuant to financing agreements	28,100,000	$ 0	$ 231,276	0	27,868,724	0
Issuance of common stock and warrants pursuant to financing agreements (in shares)		0	23,127,566
Issuance of common stock from exercise of contingent purchase right	$ 46,232	$ 0	$ 46,232	0	0	0
Issuance of common stock from exercise of contingent purchase right (in shares)	0		4,623,197
Partial settlement of contingent purchase rights derivative	$ 5,279,744	0	$ 0	0	5,279,744	0
Stock issuance costs	(96,512)	0	0	0	(96,512)	0
Stock-based compensation expense, net of forfeitures	2,995,240	0	0	0	2,995,240	0
Net loss	(9,453,488)	0	0	0	0	(9,453,488)
Balance at Dec. 31, 2016	20,783,775	$ 0	$ 602,760	(8,034,244)	470,147,086	(441,931,827)
Balance (in shares) at Dec. 31, 2016		0	60,196,574
Issuance of common stock and warrants pursuant to financing agreements	23,884,475	$ 0	$ 79,519	0	23,804,956	0
Issuance of common stock and warrants pursuant to financing agreements (in shares)		0	7,951,865
Issuance of common stock from exercise of contingent purchase right	15,191	$ 0	$ 15,191	0	0	0
Issuance of common stock from exercise of contingent purchase right (in shares)		0	1,519,096
Issuance of common stock for options exercised	325,999	$ 0	$ 1,545	0	324,454	0
Issuance of common stock for options exercised (in shares)		0	154,545
Partial settlement of contingent purchase rights derivative	4,142,157	$ 0	$ 0	0	4,142,157	0
Stock issuance costs	(491,721)	0	0	0	(491,721)	0
Stock-based compensation expense, net of forfeitures	650,440	0	0	0	650,440	0
Net loss	(10,770,202)	0	0	0	0	(10,770,202)
Balance at Dec. 31, 2017	$ 38,540,114	$ 0	$ 699,015	$ (8,034,244)	$ 498,577,372	$ (452,702,029)
Balance (in shares) at Dec. 31, 2017		0	69,822,080

XML

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (10,770,202)	$ (9,453,488)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	117,779	66,451
Net gain on disposal of assets	0	(12,459)
Stock-based compensation expense	650,440	2,995,240
Non-cash interest	7,476	26,308
Change in fair value of contingent rights	19,891	6,788
Changes in operating assets and liabilities:
Prepaid expenses and other	(361)	86,029
Accounts payable	849,365	180,526
Payable to related party	2,228,366	0
Accrued liabilities	495,011	81,486
Net cash used in operating activities	(6,402,235)	(6,023,119)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment	(934,702)	(223,233)
Proceeds from sale of property and equipment	0	158,446
Net cash used in investing activities	(934,702)	(64,787)
CASH FLOWS FROM FINANCING ACTIVITIES
Stock issuance costs	(462,841)	(96,512)
Proceeds from sale of common stock and warrants	23,870,786	28,146,232
Proceeds from exercise of stock options	325,999	0
Net cash provided by financing activities	23,733,944	28,049,720
Net increase in cash and cash equivalents	16,397,007	21,961,814
Cash and cash equivalents at beginning of year	27,092,928	5,131,114
Cash and cash equivalents at end of year	43,489,935	27,092,928
Non-cash financing activity:
Warrant issued to placement agent	28,880	0
Partial settlement of contingent rights derivative	4,142,157	5,279,744
Non-cash investing activity:
Disposal of fully depreciated property and equipment, at cost	$ 7,523	$ 25,204

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DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

12 Months Ended

Dec. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Accounting [Text Block]

1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

CASI Pharmaceuticals, Inc. (“CASI” or the “Company”) is a U.S. based biopharmaceutical company dedicated to bringing high quality, cost-effective pharmaceutical products and innovative oncology therapeutics to patients. The Company intends to execute its plan to become a leading pharmaceutical company with a substantial market share in China. We are headquartered in Rockville, Maryland with established China operations that are expanding as we continue to further in-license or acquire products for our pipeline.

The Company’s pipeline features (1) EVOMELA^®, MARQIBO^®, and ZEVALIN^®, all U.S. Food and Drug Administration (“FDA”) approved drugs in-licensed from Spectrum Pharmaceuticals, Inc. for China regional rights, and currently in various stages in the regulatory process for market approval in China, (2) an acquired portfolio (see Note 12) of 25 FDA-approved abbreviated new drug applications (“ANDAs”), one ANDA that FDA tentatively approved, and three ANDAs that are pending FDA approval, from which the Company intends to prioritize a select subset of product registration and commercialization in China, (3) our proprietary drug candidate, ENMD-2076, currently in Phase 2 clinical development, and (4) CASI-001 and CASI-002, proprietary early-stage candidates in immuno-oncology in preclinical development. The Company’s pipeline reflects a risk-balanced approach between products in various stages of development, and between products that it develops and those that it develops with the Company’s partners for the China regional market. The Company intends to continue building a significant product pipeline of high quality, cost-effective pharmaceuticals, as well as innovative drug candidates that it will commercialize alone in China and with partners for the rest of the world. For in-licensed products, the Company uses a market-oriented approach to identify pharmaceutical candidates that it believes have the potential for gaining widespread market acceptance, either globally or in China, and for which development can be accelerated under the Company’s drug development strategy.

The Company’s focus is to bring high quality, cost-effective pharmaceutical products and innovative oncology therapeutics to patients. The implementation of its plans will include leveraging the Company’s resources in both the United States and China. In order to capitalize on the drug development and capital resources available in China, the Company is doing business in China through its wholly-owned China-based subsidiary that will execute the China portion of the Company’s drug development strategy, including conducting clinical trials in China, pursuing local funding opportunities and strategic collaborations, and implementing the Company’s transition to a commercial enterprise.

In September 2014, the Company acquired from Spectrum Pharmaceuticals, Inc. and certain of its affiliates (together referred to as “Spectrum”) exclusive rights in greater China (including Taiwan, Hong Kong and Macau) to three in-licensed oncology products, including EVOMELA^™ (melphalan hydrochloride for injection) approved in the U.S. primarily for use as a high-dose conditioning treatment prior to hematopoietic progenitor (stem) cell transplantation in patients with multiple myeloma, MARQIBO^® (vinCRIStine sulfate LIPOSOME injection) approved in the U.S. for advanced adult Ph- acute lymphoblastic leukemia (ALL), and ZEVALIN^® (ibritumomab tiuxetan) approved in the U.S. for advanced non-Hodgkin’s lymphoma.

On January 26, 2018, the Company acquired a portfolio of 25 U.S. FDA-approved abbreviated new drug applications (ANDAs), one ANDA that FDA tentatively approved, and three ANDAs that are pending FDA approval. CASI intends to select and commercialize certain products from the portfolio that offer unique market and cost-effective manufacturing opportunities in China and/or in the U.S.

The Company’s primary focus is to acquire high quality, cost-effective medicines, as well as to in-license clinical-stage and late-stage drug candidates so that it can immediately employ its U.S. and China drug development model to accelerate commercialization, and clinical and regulatory progress. In addition to its high quality, cost-effective medicines, and clinical-and late-stage approach for innovative products, the Company has other potential drug candidates in preclinical development which it will continue to evaluate in 2018.

The accompanying consolidated financial statements include the accounts of CASI Pharmaceuticals, Inc. and its subsidiaries, Miikana Therapeutics, Inc. (“Miikana”) and CASI Pharmaceuticals (Beijing) Co., Ltd. (“CASI China”). CASI China is a non-stock Chinese entity with 100% of its interest owned by CASI. CASI China received approval for a business license from the Beijing Industry and Commercial Administration in August 2012 and has operating facilities in Beijing. All inter-company balances and transactions have been eliminated in consolidation.

LIQUIDITY RISKS AND MANAGEMENT’S PLANS

Since inception, the Company has incurred significant losses from operations and has incurred an accumulated deficit of $452.7 million.   The Company restructured its business in 2012 in connection with an investment led by one of the Company’s largest stockholders, followed by implementation of a name change to reflect its core mission and business strategy. The Company expects to continue to incur operating losses for the foreseeable future due to, among other factors, its continuing clinical activities. In March 2018, the Company entered into securities purchase agreements pursuant to which the Company is issuing 15,432,091 shares of its common stock with accompanying warrants to purchase 6,172,832 shares of its common stock in a $50 million private placement (the “2018 Strategic Financing”) (see Note 8). To date, the Company has received gross proceeds of $29.3 million and expects to receive additional gross proceeds of $20.7 million in the near future. The 2018 Strategic Financing Closing included an investment from ETP Global Fund, L.P., a healthcare investment fund. The managing member of Emerging Technology Partners, LLC, which is the general partner of ETP Global Fund, L.P., is also the Executive Chairman of the Company. The 2018 Strategic Financing also included an investment from IDG-Accel China Growth Fund III L.P. (“IDG-Accel Growth”) and IDG-Accel China III Investors L.P. (“IDG-Accel Investors”). A director and shareholder of IDG-Accel China Growth Fund GP III Associates Ltd., which is the ultimate general partner of IDG-Accel Growth and IDG-Accel Investors, is also a board member of the Company. In October 2017, the Company entered into securities purchase agreements for an approximately $23.8 million strategic financing. The Company held its initial closing on October 17, 2017, a second closing on October 23, 2017 and a final closing on November 20, 2017 and received approximately $23.4 million in net proceeds, (collectively, the “2017 Closings”) (see Note 8). Net proceeds from the 2018 Strategic Financing and 2017 Closings are being used to prepare for the anticipated launch of the Company’s first commercial product in China, support the Company’s business development activities, advance the development of the Company’s pipeline, support its marketing and commercial planning activities, and for other general corporate purposes.

As a result of the 2018 Strategic Financing and 2017 Closings the Company believes that it has sufficient resources to fund its operations at least through March 29, 2019. As of December 31, 2017, approximately $12.2 million of the Company’s cash balance was held by CASI China. The Company intends to continue to exercise tight controls over operating expenditures and will continue to pursue opportunities, as required, to raise additional capital and will also actively pursue non- or less-dilutive capital raising arrangements in China to support the Company’s dual-country approach to drug development.

In order to capitalize on the drug development and capital resources available in China, the Company is doing business in China through its wholly-owned China-based subsidiary that will execute the China portion of the Company’s drug development strategy, including commercialization and conducting clinical trials in China, pursuing local funding opportunities and strategic collaborations, and implementing the Company’s plan for development and commercialization in the Chinese market.

The Company intends to pursue additional financing opportunities as well as opportunities to raise capital through forms of non- or less- dilutive arrangements, such as partnerships and collaborations with organizations that have capabilities and/or products that are complementary to the Company’s capabilities and products in order to continue the development of the product candidates that the Company intends to pursue to commercialization.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2017

Accounting Policies [Abstract]

Basis of Presentation and Significant Accounting Policies [Text Block]

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SEGMENT INFORMATION

The Company currently operates in one business segment, which is the development of innovative therapeutics addressing cancer and other unmet medical needs for the global market. The Company is managed and operated as one business. CASI’s senior management team reports to the Board of Directors and is responsible for aligning the Company’s business strategy with its core scientific strengths, while maintaining prudent resource management, fiscal responsibility and accountability. The Company employs a drug development strategy in the United States and China to develop targeted therapeutics for the global market that are potential first-in-class or market-leading compounds for treatment of cancer.

The Company does not operate separate lines of business with respect to its product candidates. Accordingly, the Company does not have separately reportable segments as defined by authoritative guidance issued by the Financial Accounting Standards Board (FASB).

RESEARCH AND DEVELOPMENT

Research and development expenses consist primarily of compensation and other expenses related to research and development personnel, research collaborations, costs associated with pre-clinical correlative testing and clinical trials of the Company’s drug candidates, including the costs of manufacturing drug substance and drug product, regulatory maintenance costs, and facilities expenses. Research and development costs are expensed as incurred.

PROPERTY AND EQUIPMENT

Furniture and equipment and leasehold improvements are stated at cost and are depreciated or amortized over their estimated useful lives of 3 to 5 years. Depreciation and amortization is determined on a straight-line basis. Depreciation and amortization expense was $117,779 and $66,451 in 2017 and 2016, respectively.

Property and equipment consists of the following:

	DECEMBER 31,
	2017		2016
Furniture and equipment	$	1,150,052	$	480,172
Leasehold improvements		268,734		11,435
		1,418,786		491,607
Less: accumulated depreciation and amortization		(372,272)		(262,016)
	$	1,046,514	$	229,591

IMPAIRMENT OF LONG-LIVED ASSETS

In accordance with authoritative guidance issued by the FASB, the Company periodically evaluates the value reflected in its consolidated balance sheets of long-lived assets, such as equipment, when events and circumstances indicate that the carrying amount of an asset may not be recovered. Such events and circumstances include the use of the asset in current research and development projects, any potential alternative uses of the asset in other research and development projects in the short to medium term and restructuring plans entered into by the Company. No impairment charges were recorded in 2017 and 2016.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash and highly liquid investments with original maturities of less than 90 days. Substantially all of the Company’s cash equivalents are held in short-term money market accounts.

FOREIGN CURRENCY TRANSLATION

The U.S. dollar is the functional and reporting currency of the Company. Foreign currency denominated assets and liabilities of the Company and all of its subsidiaries are translated into U.S. dollars. Accordingly, monetary assets and liabilities are translated using the exchange rates in effect at the consolidated balance sheet date and revenues and expenses at the rates of exchange prevailing when the transactions occurred. Remeasurement adjustments are included in income (loss). As discussed in Note 12, on January 26, 2018 the Company acquired a portfolio of ANDAs.  Management believes that this transaction provides significant and permanent changes to its operations in China, allowing its subsidiary in China to generate operating revenues from the China marketplace in the future and potentially to sustain their own operations without the necessity of parent support.  Accordingly, effective January 1, 2018, the functional currency of the Company’s subsidiary based in China has been changed to the local currency of the China Renminbi (“RMB”).

EXPENSES FOR CLINICAL TRIALS

Expenses for clinical trials are incurred from planning through patient enrollment to reporting of the data. The Company estimates expenses incurred for clinical trials that are in process based on patient enrollment and based on clinical data collection and management. Costs that are associated with patient enrollment are recognized as each patient in the clinical trial completes the enrollment process. Estimated clinical trial costs related to enrollment can vary based on numerous factors, including expected number of patients in trials, the number of patients that do not complete participation in a trial, and the length of participation for each patient. Costs that are based on clinical data collection and management are recognized in the reporting period in which services are provided. In the event of early termination of a clinical trial, the Company accrues an amount based on estimates of the remaining non-cancelable obligations associated with winding down the clinical trial. As of December 31, 2017 and 2016, clinical trial accruals were $402,773 and $499,028, respectively, and are included in accounts payable in the accompanying consolidated balance sheets.

INCOME TAXES

Income tax expense is accounted for in accordance with authoritative guidance issued by the FASB. Income tax expense has been provided using the asset and liability method. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities as measured by the enacted tax rates that will be in effect when these differences reverse. The Company provides a valuation allowance against net deferred tax assets if, based upon the available evidence, it is not more likely than not that the deferred tax assets will be realized.

The Company accounts for uncertain tax positions pursuant to the guidance of FASB Accounting Standards Codification Topic 740, Income Taxes. The Company recognizes interest and penalties related to uncertain tax positions, if any, in income tax expense. As of December 31, 2017 and 2016, the Company did not accrue any interest related to uncertain tax positions. To date, there have been no interest or penalties charged to the Company in relation to the underpayment of income taxes.

REVENUE RECOGNITION

Revenue for product sales is not recognized until it is realized or realizable and earned. Revenue is recognized when all of the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price to the buyer is fixed and determinable and collectibility is reasonably assured.

NET LOSS PER SHARE

Net loss per share (basic and diluted) was computed by dividing net loss attributable to common shareholders by the weighted average number of shares of common stock outstanding. Outstanding options and warrants totaling 17,849,331 and 15,923,807 as of December 31, 2017 and 2016, respectively, were anti-dilutive and, therefore, were not included in the computation of weighted average shares used in computing diluted loss per share.

SHARE-BASED COMPENSATION

The Company records compensation expense associated with service and performance based stock options and other equity-based compensation in accordance with provisions of authoritative guidance. The fair value of awards whose fair values are calculated using the Black-Scholes option pricing model is generally being amortized on a straight-line basis over the requisite service period and is recognized based on the proportionate amount of the requisite service period that has been rendered during each reporting period. Share-based awards granted to employees with a performance condition are measured based on the probable outcome of that performance condition during the requisite service period. Awards with performance conditions will be expensed if it is probable that the performance condition will be achieved. During the years ended December 31, 2017 and 2016, $30,500 and $10,100, respectively, of stock compensation expense was recorded for share awards with performance conditions.

NEW ACCOUNTING PRONOUNCEMENTS

The Company has implemented all new accounting pronouncements that are in effect and that may impact the Company’s consolidated financial statements.

In January 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-01, Financial Instruments–Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. The accounting standard primarily affects the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments.  In addition, it includes a clarification related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The accounting guidance is effective for annual reporting periods (including interim periods within those periods) beginning after December 15, 2017. The Company intends to adopt ASU 2016-01 in the first quarter of 2018 and does not expect that the adoption of this ASU will have a material effect on the consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 supersedes existing lease guidance, including Accounting Standards Codification (ASC) 840 - Leases. Among other things, the new standard requires recognition of a right-of-use asset and liability for future lease payments for contracts that meet the definition of a lease. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Earlier application is permitted. The standard must be applied using a modified retrospective approach. The Company is currently evaluating the effect that the adoption of this ASU will have on its consolidated financial statements.

In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718) Scope of Modification Accounting. ASU 2017-09 provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. This ASU does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions, or award classification and would not be required if the changes are considered non-substantive. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company intends to adopt ASU 2017-09 in the first quarter of 2018 and does not expect that the adoption of this ASU will have a material effect on the consolidated financial statements.

There are no other recently issued accounting pronouncements that are expected to have a material effect on the Company’s financial position, results of operations or cash flows.

FAIR VALUE OF FINANCIAL INSTRUMENTS AND CONCENTRATIONS OF CREDIT RISK

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company maintains its cash in bank deposit accounts, which, at times, may exceed federally insured amounts. The Company believes it is not exposed to significant credit risk on cash and cash equivalents. The carrying amount of current assets and liabilities approximates their fair values due to their short-term maturities.

USE OF ESTIMATES

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company’s most critical accounting estimates relate to accounting policies for derivatives, notes payable valuation, 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 may differ from those estimates, and such differences may be material to the consolidated financial statements.

DERIVATIVES

The Company entered into investment agreements with Spectrum (see Note 4) resulting in a purchase price derivative. In accordance with GAAP, derivative instruments are recognized as either assets or liabilities on the consolidated balance sheets and are measured at fair value with gains or losses recognized in earnings or other comprehensive income depending on the nature of the derivative. The Company determines the fair value of derivative instruments based on available market data using appropriate valuation models, giving consideration to all of the rights and obligations of each instrument.  The derivative liability is re-measured at fair value at the end of each reporting period as long as it is outstanding. As of December 31, 2017, the derivative liability has been settled and is no longer outstanding.

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RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2017

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

3. RELATED PARTY TRANSACTIONS

In April, June 2017, and November 2017, under supply agreements with Spectrum, the Company received shipments of EVOMELA^®, MARQIBO^®, and ZEVALIN^® respectively, in China for quality testing purposes to support CASI’s application for import drug registration. In 2016, the Company also received shipments of MARQIBO^® in China for quality testing purposes to support CASI’s application for import drug registration. The former CEO of Spectrum and current board member of Spectrum is also a board member of CASI. The total cost of the materials was approximately $2,705,000 and $155,220 in 2017 and 2016, respectively, which is included in research and development expense for the respective years. As of December 31, 2017, the amount payable to Spectrum totaling $2,228,366 is reflected as a related party payable in the accompanying consolidated balance sheet.

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LICENSE ARRANGEMENTS

12 Months Ended

Dec. 31, 2017

Research and Development [Abstract]

Research, Development, and Computer Software Disclosure [Text Block]

4. LICENSE ARRANGEMENTS

The Company has certain product rights and perpetual exclusive licenses from Spectrum Pharmaceuticals, Inc. and certain of its affiliates (together referred to as “Spectrum”) to develop and commercialize the following commercial oncology drugs and drug candidates in the greater China region (which includes China, Taiwan, Hong Kong and Macau) (the “Territories”):

· EVOMELA^® (melphalan) for Injection (“Evomela”);

· MARQIBO^® (vinCRIStine sulfate LIPOSOME injection) (“Marqibo”); and

· ZEVALIN^® (ibritumomab tiuxetan) (“Zevalin”).

CASI is responsible for developing and commercializing these three drugs in the Territories, including the submission of import drug registration applications and conducting confirmatory clinical trials as needed.

The Company is in various stages of the regulatory and development process to obtain marketing approval for EVOMELA^®, MARQIBO^®, and ZEVALIN^® in its territorial region, with ZEVALIN^® commercially available in Hong Kong. In January 2016, the China Food and Drug Administration (CFDA) accepted for review the Company’s import drug registration application for MARQIBO^® and currently is in the quality testing phase of the regulatory process. On March 10, 2016, Spectrum received notification from the U.S. Food and Drug Administration (FDA) of the grant of approval of its New Drug Application (NDA) for EVOMELA^® primarily for use as a high-dose conditioning treatment prior to hematopoietic progenitor (stem) cell transplantation in patients with multiple myeloma. In December 2016, the CFDA accepted for review the Company’s import drug registration application for EVOMELA^® and in 2017 has granted priority review of the import drug registration clinical trial application (CTA), which has completed the quality testing phase of the regulatory process and is currently in technical review by Center for Drug Evaluation (CDE) of the CFDA as part of the regulatory process. In 2017, the CFDA accepted for review the Company’s import drug registration for ZEVALIN^® including both the antibody kit and the radioactive Yttrium-90 component.

As consideration for the acquisition from Spectrum, the Company issued a total 5,405,382 shares of its common stock, a $1.5 million 0.5% secured promissory note originally due in March 2016, and certain contingent rights (“Contingent Rights”) to purchase additional shares of its common stock, which Contingent Rights expire upon the occurrence of certain events. The note has been subsequently amended to extend the due date to September 17, 2019 (see Note 5). The Company accounted for the acquisition of the product rights and licenses as an asset acquisition and, accordingly, recorded the acquired product rights and licenses at their estimated fair values based on the fair value of the consideration exchanged (including transaction costs) of approximately $19.7 million.

The fair value of the common stock issued was based on the closing market price of the Company’s common stock on the acquisition date. The fair value of the promissory note was measured using Level 3 unobservable inputs (see Note 6) including primarily the Company’s estimated incremental borrowing rate as provided by a commercial lending institution.

The Contingent Rights provide Spectrum with the option to acquire, at a strike price of par value, a variable number of additional shares of common stock that allows Spectrum to maintain its fully-diluted ownership percentage for a certain time period and under certain terms and conditions. These Contingent Rights will expire on the earlier of raising an aggregate of $50 million or September 17, 2019 (subject to possible extension only for certain outstanding derivative securities). Based on the terms and conditions of the Contingent Rights, the Company has determined that the Contingent Rights are a derivative financial instrument that is not indexed to its common stock and therefore is required to be accounted for at fair value, initially and on a recurring basis. The fair value of the Contingent Rights was measured using Level 3 unobservable inputs; the unobservable inputs include estimates of the Company’s future capital requirements, and the timing, probability, size and characteristics of those capital raises, among other inputs. The total estimated fair value of the Contingent Rights was $0 and $4,122,266 as of December 31, 2017 and 2016, respectively; the change in fair value (see Note 6) is reflected as change in fair value of contingent rights in the accompanying consolidated statements of operations.

As a result of the 2017 Closings that occurred during 2017 (see Note 8), Spectrum exercised its Contingent Rights and the Company issued Spectrum 1,519,096 shares of common stock during 2017. This exercise resulted in the full settlement of the contingent rights derivative liability reducing the value to $0 as of December 31, 2017. The Company recorded a reduction to the contingent rights derivative liability and an increase to additional paid-in capital of $4,142,157 in 2017 related to the partial settlement of the contingent rights derivative as a result of the 2017 Closings, which is reflected in the accompanying consolidated balance sheet as of December 31, 2017. As a result of the 2016 Closings and the October 2016 Offering that occurred during 2016 (see Note 8), Spectrum exercised its Contingent Rights and the Company issued 4,623,197 shares of common stock during 2016. The Company recorded a reduction to the contingent rights derivative liability and an increase to additional paid-in capital of $5,279,744 in 2016 related to the partial settlement of the contingent rights derivative as a result of the 2016 Closings and the October 2016 Offering, which is reflected in the accompanying consolidated balance sheet as of December 31, 2016.

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NOTE PAYABLE

12 Months Ended

Dec. 31, 2017

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

5. NOTE PAYABLE

As part of the license arrangements with Spectrum (see Note 4), the Company issued to Spectrum a $1.5 million 0.5% secured promissory note originally due March 17, 2016. The promissory note was recorded initially at its fair value, giving rise to a discount of approximately $136,000; the promissory note is presented as note payable, net of discount in the accompanying consolidated balance sheets. For the years ended December 31, 2017 and 2016, the Company recognized approximately $7,000 and $26,000 of non-cash interest expense, respectively, related to the amortization of the debt discount, using the effective interest rate method. On September 28, 2015, the Company entered into a First Amendment to Secured Promissory Note (the “Amendment”) with Spectrum. Pursuant to the Amendment, the Company and Spectrum agreed to extend the maturity date of the note to March 17, 2017. On December 13, 2016, the Company entered into a Second Amendment to Secured Promissory Note (the “Second Amendment”) with Spectrum to extend the maturity date of the Note to March 17, 2018. On December 20, 2017, the Company entered into a Third Amendment to Secured Promissory Note (the “Third Amendment”) with Spectrum to extend the maturity date of the Note to September 17, 2019. All other terms remain the same.

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FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

6.  FAIR VALUE MEASUREMENTS

Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. U.S. GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of observability of inputs used in measuring fair value. These tiers include:

⋅ Level 1, defined as observable inputs such as quoted prices in active markets for identical assets;

⋅ Level 2, defined as observable inputs other than Level 1 prices such as quoted prices for similar assets; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

⋅ Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

An asset’s or liability’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. At each reporting period, the Company performs a detailed analysis of its assets and liabilities that are measured at fair value. All assets and liabilities for which the fair value measurement is based on significant unobservable inputs or instruments which trade infrequently and therefore have little or no price transparency are classified as Level 3.

The inputs used in measuring the fair value of cash and cash equivalents are considered to be Level 1 in accordance with the three-tier fair value hierarchy. The fair market values are based on period-end statements supplied by the various banks and brokers that held the majority of the Company’s funds. The fair value of short-term financial instruments (primarily accounts receivable, prepaid expenses, accounts payable, accrued expenses, and other current assets and liabilities) approximates their carrying values because of their short-term nature.

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis:

The Contingent Rights issued to Spectrum in connection with the license arrangements (see Note 4) were considered derivative liabilities and were recorded initially at their estimated fair value, and are marked to market each reporting period until settlement. The fair value of the Contingent Rights was measured using Level 3 unobservable inputs; the unobservable inputs include estimates of the Company’s future capital requirements, and the timing, probability, size and characteristics of those capital raises, among other inputs. Generally, if the estimates of the size and probability of the Company’s future capital requirements increase, the fair value of the Contingent Rights will also increase.

The following table presents the Company’s financial liabilities accounted for at fair value on a recurring basis as of December 31, 2016 by level within the fair value hierarchy. The Contingent Rights were fully settled during 2017 resulting in a $0 fair value as of December 31, 2017.

	As of December 31, 2016
	Level 1		Level 2		Level 3		Total
Liabilities - Contingent Rights	$	-	$	-	$	4,122,266	$	4,122,266

The following table presents the changes in the Company’s financial liabilities accounted for at fair value on a recurring basis using Level 3 unobservable inputs:

	2017		2016
Balance at beginning of year	$	4,122,266	$	9,395,222
Partial settlement of Contingent Rights		(4,142,157)		(5,279,744)
Change in fair value of Contingent Rights		19,891		6,788
Balance at end of year	$	-	$	4,122,266

Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis:

The promissory note issued to Spectrum in connection with the license arrangements (see Note 4) was initially recorded at its fair value using Level 3 unobservable inputs including primarily the Company’s estimated incremental borrowing rate as provided by a commercial lending institution.

Non-Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis:

The Company does not have any non-financial assets and liabilities that are measured at fair value on a recurring basis.

Non-Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis:

The Company measures its long-lived assets, including property and equipment, at fair value on a non-recurring basis. These assets are recognized at fair value when they are deemed to be impaired. No such fair value impairment was recognized for the years ended December 31, 2017 and 2016.

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INCOME TAXES

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

7. INCOME TAXES

The income tax provision is based on loss before income taxes of $(8,658,120) in the U.S. and $(2,112,082) in China. The Company has net operating loss (NOL) carryforwards for income tax purposes of approximately $368,134,000 at December 31, 2017 that expire in years 2018 through 2038. The Company also has research and development (“R&D”) tax credit carryforwards of approximately $9,593,000 as of December 31, 2017 that expire in years 2018 through 2038. Under the provisions of the Internal Revenue Code, the NOL and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. NOL and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50%, as defined under Sections 382 and 383 of the Internal Revenue Code of 1986, respectively, as well as similar state tax provisions. This could limit the amount of tax attributes that the Company can utilize annually to offset future taxable income or tax liabilities. The amount of the annual limitation, if any, will be determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. For financial reporting purposes, a valuation allowance has been recognized to reduce the net deferred tax assets to zero due to uncertainties with respect to the Company’s ability to generate taxable income in the future sufficient to realize the benefit of deferred income tax assets.

For financial reporting purposes, loss before taxes includes the following components:

	2017		2016
United States	$	(8,658,120)	$	(7,375,974)
Foreign		(2,112,082)		(2,077,514)
Total	$	(10,770,202)	$	(9,453,488)

Deferred income taxes reflect the net effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred income tax assets and liabilities as of December 31, 2017 and 2016 are as follows:

	DECEMBER 31,
	2017		2016
Deferred income tax assets:
Net operating loss carryforwards	$	96,786,000	$	140,468,000
Research and development credit carryforward		9,592,000		9,399,000
Intangible assets		4,184,000		6,913,000
Equity-based compensation		3,812,000		5,578,000
Other		164,000		297,000
Valuation allowance for deferred income tax assets		(114,538,000)		(162,655,000)
Net deferred income tax assets	$	-	$	-

On December 22, 2017, H.R.1, known as the “Tax Act,” was signed into law and makes broad and complex changes to the U.S. tax code, including, but not limited to, (1) reducing the U.S. federal corporate tax rate to a flat rate of 21% for periods after December 31, 2017 and (2) requiring a one-time transition tax on certain un-repatriated earnings of foreign subsidiaries that is payable over eight years. As a result of the reduction of the corporate tax rate to 21%, U.S. generally accepted accounting principles require companies to re-value their deferred tax assets and liabilities as of the date of enactment, with resulting tax effects accounted for in the reporting period of enactment. As a result of this revaluation, the Company has reduced its pre-valuation allowance deferred tax asset by $52,258,000 in the year ended December 31, 2017, with a corresponding decrease in the valuation allowance on its net deferred tax assets. The Company has no unrepatriated earnings in any of its foreign subsidiaries as they incurred losses since inception.

A reconciliation of the provision for income taxes to the federal statutory rate is as follows:

	2017		2016
Tax benefit at statutory rate	$	(3,662,000)	$	(3,214,000)
Effect of tax law change		52,258,000		-
State taxes		(290,000)		(232,000)
Net R&D credit adjustment		(185,000)		(105,000)
Attribute expiration		50,000		-
Nondeductible expenses		6,000		4,000
Change in valuation allowance		(48,117,000)		3,461,000
Other		125,000		177,000
Changes in applicable tax rates		(185,000)		(91,000)
	$	-	$	-

The Company had $3,133,000 of unrecognized tax benefits as of December 31, 2016 related to net R&D tax credit carryforwards. The Company had a full valuation allowance on the net deferred tax asset recognized in the consolidated financial statements. For the year ended December 31, 2017, there were net additional unrecognized tax benefits of $65,000 related to R&D tax credits. The Company has a full valuation allowance at December 31, 2017 and 2016 against the full amount of its net deferred tax assets and, therefore, there was no impact on the Company’s financial position.

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:

	2017		2016
Unrecognized tax benefits balance at January 1	$	3,133,000	$	3,097,000
Additions for Tax Positions of Prior Periods		3,000		1,000
Additions for Tax Positions of Current Period		62,000		35,000
Unrecognized tax benefits balance at December 31	$	3,198,000	$	3,133,000

The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense. As of December 31, 2017 and 2016, the Company had no accrued interest or penalties related to uncertain tax positions.

The tax returns for all years in the Company’s major tax jurisdictions are not settled as of December 31, 2017. Due to the existence of tax attribute carryforwards (which are currently offset by a full valuation allowance), the Company treats all years’ tax positions as unsettled due to the taxing authorities’ ability to modify these attributes.

The Company believes that the total unrecognized tax benefit, if recognized, would impact the effective rate, however, such reversal may be offset by a corresponding adjustment to the valuation allowance.

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STOCKHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2017

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

8. STOCKHOLDERS’ EQUITY

SECURITIES PURCHASE AGREEMENTS

As described in Note 1, on March 19, 2018, the Company entered into securities purchase agreements (the “Securities Purchase Agreements”) with certain institutional investors, accredited investors and current stockholders, pursuant to which the Company is issuing 15,432,091 shares of its common stock with accompanying warrants to purchase 6,172,832 shares of its common stock in a $50 million private placement. To date, the Company has received gross proceeds of $29.3 million and expects to receive additional gross proceeds of $20.7 million in the near future. The purchase price for each share of common stock and warrant was $3.24. The warrants will become exercisable 180 days after issuance at a $3.69 per share exercise price, and will expire five years from the date of issuance. The Securities Purchase Agreements and warrants each include additional customary representations, warranties and covenants. The Company also agreed to file a resale registration within 120 days following the closing covering the shares of common stock issued and the shares of common stock underlying the warrants.

As described in Note 1, on October 13, 2017, the Company entered into securities purchase agreements with certain institutional investors, accredited investors and current stockholders pursuant to which the Company agreed to sell 7,951,865 shares of its common stock and warrants exercisable for up to 1,590,373 shares of its common stock (exclusive of the Agent Warrants described below) in a registered direct offering (the “2017 Offering”) for gross proceeds of $23,855,595. As a result of the 2017 Closings related to the Offering, the Company received approximately $23.4 million after offering expenses and issued 7,951,865 shares of common stock. The shares and warrants were sold together, consisting of one share of common stock and a warrant to purchase 0.20 shares of common stock for each share of common stock purchased, at a combined offering price of $3.00. The warrants are exercisable beginning on April 17, 2018 and expire on April 17, 2020. The warrants have an exercise price of $3.75 per share. The fair value of the warrants issued is $1,558,566, calculated using the Black-Scholes-Merton valuation model value of $0.98 with a contractual life of 2.5 years, an assumed volatility of 85.4%, and a risk-free interest rate of 1.54%.

In connection with the 2017 Offering, the Company issued to its placement agent or its designees warrants to purchase 48,133 shares of common stock at an exercise price of $3.75 per share of common stock (the “Agent Warrants”), representing the number of warrants equal to an aggregate of 4% of the number of shares sold to investors placed by the placement agent in the 2017 Offering, excluding investments made by certain China-focused investors that were placed by the Company. The Agent Warrants are exercisable beginning on April 17, 2018 and expire on April 17, 2019. The fair value of the warrants issued is $28,880, calculated using the Black-Scholes-Merton valuation model value of $0.60 with a contractual life of 1.5 years, an assumed volatility of 77.8%, and a risk-free interest rate of 1.54%.

On September 20, 2015, the Company entered into stock purchase agreements with certain institutional and accredited investors for a $25.1 million financing. Pursuant to these agreements, the Company agreed to sell to the investors in a private placement an aggregate of 20,658,434 shares of the Company’s common stock, at $1.19 per share, based on the closing bid price of the Company’s common stock on the Nasdaq Capital Market on September 18, 2015, and a total of 4,131,686 warrants, representing a 20% warrant coverage, with a purchase price of $0.125 per whole warrant share. The warrants became exercisable three months after issuance at $1.69 per share exercise price, and expire three years from the date the warrants become exercisable. The offering closed after satisfaction of certain regulatory and customary closing conditions, with the net proceeds subject to payment of offering expenses, including fees and expenses.

On January 15, 2016, the Company completed the first closing and received approximately $10.3 million and yielded approximately $10.2 million after offering expenses (the “First Closing”). The First Closing resulted in the issuance of 8,448,613 shares of Common Stock, priced at $1.19 per share, and 1,689,722 warrants, with a purchase price of $0.125 per warrant. The warrants became exercisable on April 15, 2016 at $1.69 per share exercise price, and will expire on April 15, 2019. The fair value of the warrants issued is $321,047, calculated using the Black-Scholes-Merton valuation model value of $0.19 with a contractual life of 3.25 years, an assumed volatility of 70.1%, and a risk-free interest rate of 1.08%.

On June 24, 2016, the Company completed the second closing and received approximately $6.0 million (the “Second Closing”). The Second Closing resulted in the issuance of 4,906,118 shares of Common Stock, priced at $1.19 per share, and 981,223 warrants, with a purchase price of $0.125 per warrant. The warrants became exercisable on September 23, 2016 at $1.69 per share exercise price, and will expire on September 23, 2019. The fair value of the warrants issued is $431,738, calculated using the Black-Scholes-Merton valuation model value of $0.44 with a contractual life of 3.25 years, an assumed volatility of 70.4%, and a risk-free interest rate of 0.76%.

On July 5, 2016, the Company completed the third closing and received $1.0 million (the “Third Closing”). The Third Closing resulted in the issuance of 823,045 shares of Common Stock, priced at $1.19 per share, and 164,609 warrants, with a purchase price of $0.125 per warrant. The warrants became exercisable on October 4, 2016 at $1.69 per share exercise price, and will expire on October 4, 2019. The fair value of the warrants issued is $67,490, calculated using the Black-Scholes-Merton valuation model value of $0.41 with a contractual life of 3.25 years, an assumed volatility of 70.6%, and a risk-free interest rate of 0.66%.

On October 3, 2016, the Company completed the final closing and received $7.8 million (the “Final Closing”). The Final Closing resulted in the issuance of 6,480,655 shares of Common Stock, priced at $1.19 per share, and 1,296,129 warrants, with a purchase price of $0.125 per warrant. The warrants became exercisable on January 2, 2017 at $1.69 per share exercise price, and will expire on January 2, 2020. The fair value of the warrants issued is $544,374, calculated using the Black-Scholes-Merton valuation model value of $0.42 with a contractual life of 3.25 years, an assumed volatility of 71.4%, and a risk-free interest rate of 0.91%. The Final Closing included an investment from ETP Global Fund, L.P., a healthcare investment fund. The managing member of Emerging Technology Partners, LLC, which is the general partner of ETP Global Fund, L.P., is also the Executive Chairman of the Company.

On October 24, 2016, the Company entered into and closed on a stock purchase agreement with an accredited investor, pursuant to which the Company agreed to sell to the investor in a private placement an aggregate of 2,469,135 shares of the Company’s Common Stock, priced at $1.190 per share, and 493,827 warrants, representing a 20% warrant coverage, with a purchase price of $0.125 per whole warrant share, for aggregate gross proceeds to the Company of $3.0 million (the “October 2016 Offering”). The warrants became exercisable on January 23, 2017 at $1.69 per share exercise price, and will expire on January 23, 2020. The fair value of the warrants issued in the October 2016 Offering is $306,173, calculated using the Black-Scholes-Merton valuation model value of $0.62 with a contractual life of 3.25 years, an assumed volatility of 72.2%, and a risk-free interest rate of 1.00%.

The Company granted registration rights to all of the investors and filed a resale registration statement covering the shares of common stock and the shares of common stock underlying the warrants on December 2, 2016. The registration statement was declared effective by the SEC on December 21, 2016.

COMMON STOCK SALES AGREEMENT

On February 23, 2018, the Company entered into a Common Stock Sales Agreement (the “Sales Agreement”) with H.C. Wainwright & Co., LLC (“HCW”). Pursuant to the terms of the Sales Agreement, the Company may sell from time to time, at its option, shares of the Company’s common stock through HCW, as sales agent, with an aggregate sales price of up to $25 million (the “Shares”).

Any sales of Shares pursuant to the Sales Agreement will be made under the Company’s effective “shelf” registration statement (the “Registration Statement”) on Form S-3 (File No. 333-222046) which became effective on December 22, 2017 and the related prospectus supplement and the accompanying prospectus, as filed with the Securities and Exchange Commission (the “SEC”) on February 23, 2018.

Under the terms of the Sales Agreement, the Company may sell shares of its common stock through HCW by any method permitted that is deemed an “at the market offering” as defined in Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”). HCW will use its commercially reasonable efforts consistent with its normal trading and sales practices to sell the Company’s common stock from time to time, based upon the Company’s instructions (including any price, time or size limits or other customary parameters or conditions the Company may impose). Actual sales will depend on a variety of factors to be determined by the Company from time to time, including (among others) market conditions, the trading price of the Company’s common stock, capital needs and determinations by the Company of the appropriate sources of funding for the Company. The Company is not obligated to make any sales of common stock under the Sales Agreement and the Company cannot provide any assurances that it will issue any shares pursuant to the Sales Agreement. The Company will pay a commission rate of up to 3.0% of the gross sales price per share sold and agreed to reimburse HCW for certain specified expenses. The Company has also agreed pursuant to the Sales Agreement to provide HCW with customary indemnification and contribution rights.

The Company or HCW upon notice to the other, may suspend the offering of the Shares under the Sales Agreement at any time. The offering of the Shares pursuant to the Sales Agreement will terminate upon the sale of Shares in an aggregate offering amount equal to $25 million, or sooner if either the Company or HCW terminate the Sales Agreement pursuant to its terms.

Through March 2018, the Company issued 143,248 Shares under the Sales Agreement resulting in net proceeds to the Company of approximately $475,000.

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SHARE-BASED COMPENSATION AND WARRANTS

12 Months Ended

Dec. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

9. SHARE-BASED COMPENSATION AND WARRANTS

The Company has adopted incentive and nonqualified stock option plans for executive, scientific and administrative personnel of the Company as well as outside directors and consultants. In June 2017, the Company’s shareholders approved an amendment to the 2011 Long-Term Incentive Plan, increasing the number of shares reserved for issuance from 11,230,000 to 14,230,000 shares of common stock to be available for grants and awards. As of December 31, 2017, there are 11,585,315 shares issuable under options previously granted and currently outstanding, with exercise prices ranging from $0.86 to $7.37. In 2017, the Company awarded options to employees, covering up to 2,225,000 shares, in which vesting is subject to achievement of certain performance milestones. Options granted under the plans generally vest over periods varying from immediately to one to three years, are not transferable and generally expire ten years from the date of grant. As of December 31, 2017, 2,852,234 shares remained available for grant under the Company’s 2011 Long-Term Incentive Plan. On March 13, 2018, upon the recommendation of the Compensation Committee of the Board of Directors (the “Board”), the Board approved a grant of stock options to the Company’s Executive Chairman exercisable for 1 million shares of common stock that will vest and become exercisable on the first anniversary date of the grant. In addition, the Board approved the grant of a performance-based option covering 4 million shares of common stock that will vest if, within 18 months of the date of grant, specific operational and strategic milestones are achieved. Both grants are conditioned upon stockholder approval at the 2018 Annual Meeting of Stockholders.

The Company records compensation expense associated with stock options and other equity-based compensation in accordance with provisions of authoritative guidance. Compensation costs are recognized over the requisite service period, which is generally the option vesting term of up to three years. Awards with performance conditions will be expensed if it is probable that the performance condition will be achieved. For the years ended December 31, 2017 and 2016, $30,500 and $10,100, respectively was expensed for share awards with performance conditions that became probable during that period.

The Company’s net loss for the years ended December 31, 2017 and 2016 includes $650,440 and $2,995,240, respectively, of non-cash compensation expense related to the Company’s share-based compensation awards. The compensation expense related to the Company’s share-based compensation arrangements is recorded as components of general and administrative expense and research and development expense, as follows:

	2017		2016
Research and development	$	271,733	$	746,027
General and administrative		378,707		2,249,213
Share-based compensation expense	$	650,440	$	2,995,240
Net share-based compensation expense, per common share:
Basic and diluted	$	0.01	$	0.05

Stock Options

The Company uses the Black-Scholes-Merton valuation model to estimate the fair value of service based and performance based stock options granted to employees. Option valuation models, including Black-Scholes-Merton, require the input of highly subjective assumptions, and changes in the assumptions used can materially affect the grant date fair value of an award. These assumptions include the risk free rate of interest, expected dividend yield, expected volatility, and the expected life of the award.

Expected Volatility—Volatility is a measure of the amount by which a financial variable such as a share price has fluctuated (historical volatility) or is expected to fluctuate (expected volatility) during a period. The Company uses the historical volatility based on the daily price observations of its common stock during the period immediately preceding the share-based award grant that is equal in length to the award’s expected term. The Company believes that historical volatility represents the best estimate of future long term volatility.

Risk-Free Interest Rate—This is the average interest rate consistent with the yield available on a U.S. Treasury note (with a term equal to the expected term of the underlying grants) at the date the option was granted.

Expected Term of Options—This is the period of time that the options granted are expected to remain outstanding. The Company uses a simplified method for estimating the expected term of service based awards granted. For performance based and market based awards, the expected term of service is based on the derived service period.

Expected Dividend Yield—The Company has never declared or paid dividends on its common stock and does not anticipate paying any dividends in the foreseeable future. As such, the dividend yield percentage is assumed to be zero.

Forfeiture Rate—This is the estimated percentage of options granted that are expected to be forfeited or cancelled on an annual basis before becoming fully vested. The Company estimated the forfeiture rate for 2016 based on historical forfeiture experience for similar levels of employees to whom options were granted. Beginning in 2017, in accordance with authoritative guidance, forfeitures were no longer required to be estimated.

Following are the weighted-average assumptions used in valuing the stock options granted to employees during the years ended December 31, 2017 and 2016:

	Years ended December 31,
	2017			2016
Expected volatility		78.88	%		82.12	%
Risk free interest rate		1.96	%		1.29	%
Expected term of option		6.29 years			5.33 years
Forfeiture rate		-			*3.00	%
Expected dividend yield		-			-

*- In 2016, authoritative guidance required forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Throughout 2016, forfeitures were estimated at 3% and the actual forfeiture rate was 6% for 2016. The Company adjusted stock compensation expense for 2016 based on the actual forfeiture rate.

The weighted average fair value of stock options granted was $0.73 and $0.75 in 2017 and 2016, respectively.

Share-based compensation expense recognized in the consolidated statements of operations is based on awards ultimately expected to vest, net of estimated forfeitures. The authoritative guidance requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

A summary of the Company’s stock option plans and of changes in options outstanding under the plans during the years ended December 31, 2017 and 2016 is as follows:

					Weighted Average
			Weighted Average		Remaining		Aggregate Intrinsic
	Number of Options		Exercise Price		Contractual Term		Value
					In Years
Outstanding at December 31, 2015		6,694,744	$	1.99
Exercised		-	$	-
Granted		4,213,518	$	1.00
Expired		(856,512)	$	2.24
Forfeited		(516,444)	$	1.14
Outstanding at December 31, 2016		9,535,306	$	1.57
Exercised		(154,545)	$	2.11
Granted		3,199,500	$	1.05
Expired		(978,070)	$	1.64
Forfeited		(16,876)	$	0.92
Outstanding at December 31, 2017		11,585,315	$	1.42		7.46	$	21,730,182
Exercisable at December 31, 2017		8,468,971	$	1.57		6.78	$	14,781,148

The aggregate intrinsic value is calculated as the difference between (i) the closing price of the common stock at December 31, 2017 and (ii) the exercise price of the underlying awards, multiplied by the number of options that had an exercise price less than the closing price on the last trading day of the year. The intrinsic value of options exercised during the year ended December 31, 2017 totaled approximately $168,000. Cash received from option exercises under all share-based payment arrangements for the year ended December 31, 2017 was approximately $326,000. There were no options exercised in 2016.

The following summarizes information about stock options granted to employees and directors outstanding at December 31, 2017:

	Options Outstanding						Options Exercisable
			Weighted
			Average		Weighted				Weighted
	Number		Remaining		Average		Number		Average
Range of	Outstanding at		Contractual		Exercise		Exercisable at		Exercise
Exercise Prices	December 31, 2017		Life in Years		Price		December 31, 2017		Price
$0.00 - $1.00		3,950,656		8.9	$	0.93		1,538,965	$	0.87
$1.01 - $2.00		7,083,119		7.0	$	1.53		6,378,466	$	1.57
$2.01 - $3.00		375,000		4.2	$	2.24		375,000	$	2.24
$3.01 - $7.00		122,000		3.0	$	6.24		122,000	$	6.24
$7.01 - $8.00		54,540		1.5	$	7.26		54,540	$	7.26
		11,585,315		7.5	$	1.42		8,468,971	$	1.57

As of December 31, 2017, there was approximately $544,000 of total unrecognized compensation cost related to non-vested stock options. That cost is expected to be recognized over a weighted-average period of 1.8 years.

Warrants

Warrants issued generally expire after 2-5 years from the date of issuance. Stock warrant activity is as follows:

			Weighted Average
	Number of Shares		Exercise Price
Outstanding at December 31, 2015		4,010,903	$	2.27
Issued		4,625,510	$	1.69
Exercised		-	$	-
Expired		(2,247,912)	$	2.91
Outstanding at December 31, 2016		6,388,501	$	1.60
Issued		1,638,506	$	3.75
Exercised		-	$	-
Expired		(1,762,991)	$	1.46
Outstanding at December 31, 2017		6,264,016	$	2.23
Exercisable at December 31, 2017		4,625,510	$	1.69

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COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

10. COMMITMENTS AND CONTINGENCIES

COMMITMENTS

ENMD-2076. In January 2006, the Company acquired Miikana, a private biotechnology company. Pursuant to the Merger Agreement, the Company acquired all of the outstanding capital stock of Miikana Therapeutics, Inc. In 2008, the Company initiated a Phase 1 clinical trial with its Aurora A and angiogenic kinase inhibitor, ENMD-2076, in patients with solid tumors. A dosing of the first patient with ENMD-2076 triggered a purchase price adjustment milestone of $2 million, which the Company opted to pay in stock. As ENMD-2076 successfully completed Phase 1 clinical trials and advanced to Phase 2, the dosing of the first patient in 2010 triggered an additional purchase price adjustment milestone of $3 million, which was paid in stock in 2010. Under the terms of the merger agreement, the former Miikana stockholders may earn up to an additional $4 million of potential payments upon the satisfaction of additional clinical and regulatory milestones for ENMD-2076. As of December 31, 2017, the $4 million potential milestone payment remains, payable in cash or shares of stock at the Company’s option, related to the ENMD-2076 program and the dosing of the first patient in a Phase 3 pivotal trial.

With respect to the Company’s in-licensed drug candidates for the Greater China market, the Company does not have to pay any milestone payments or royalties to Spectrum; however, CASI is responsible for paying royalties or milestones, if and when applicable, owed by Spectrum to upstream licensors that licensed related technology to Spectrum in accordance with the terms of the relevant upstream licenses, and only to the extent of the Greater China portion of such upstream royalties or milestones. The Company’s sales of Zevalin in Hong Kong are subject to royalties. The Company does not expect to pay royalties for ZEVALIN^® in China and Taiwan until commercial activities begin which will not occur until after ZEVALIN^® receives marketing approval from the regulatory agencies and which is not expected to occur in 2018.  The Company does not anticipate any payment obligations for the EVOMELA^® and MARQIBO^® programs in 2018.

As of December 31, 2017, the Company also has purchase obligation commitments, in the normal course of business, for clinical trial contracts totaling approximately $300,000. In March 2018, the Company committed to a purchase obligation of EVOMELA^® from Spectrum for approximately $5.5 million.

The Company leases its principal executive offices in Rockville, MD under a lease agreement that continues through December 31, 2019. The Company leases office space in China under a lease agreement that continues through June 2018. The Company also leases lab space in China that continues through May 2022.

The future minimum payments under its facilities leases are as follows:

2018	$	337,030
2019		259,459
2020		183,378
2021		191,691
2022		44,172
Thereafter		-
Total minimum payments	$	1,015,730

Rental expense for the years ended December 31, 2017 and 2016 was approximately $440,000 and $328,000, respectively.

CONTINGENCIES

The Company is subject in the normal course of business to various legal proceedings in which claims for monetary or other damages may be asserted. Management does not believe such legal proceedings, unless otherwise disclosed herein, are material.

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EMPLOYEE RETIREMENT PLAN

12 Months Ended

Dec. 31, 2017

Compensation and Retirement Disclosure [Abstract]

Compensation and Employee Benefit Plans [Text Block]

11. EMPLOYEE RETIREMENT PLAN

The Company sponsors the CASI Pharmaceuticals, Inc. 401(k) Plan and Trust. The plan covers substantially all employees and enables participants to contribute a portion of salary and wages on a tax-deferred basis. Contributions to the plan by the Company are discretionary. Contributions by the Company totaled approximately $70,167 and $30,300 in 2017 and 2016, respectively.

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SUBSEQUENT EVENT

12 Months Ended

Dec. 31, 2017

Subsequent Events [Abstract]

Subsequent Events [Text Block]

12. SUBSEQUENT EVENT

On January 26, 2018, the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) by and between the Company and Sandoz Inc. (“Sandoz”), pursuant to which the Company acquired a portfolio of 25 U.S. FDA-approved ANDAs, 1 ANDA that FDA tentatively approved, 3 ANDAs that are pending FDA approval, and manufacturing and other information related to the products (the “Assets”). The purchase of the Assets closed simultaneously with the execution of the Asset Purchase Agreement.  Pursuant to the Asset Purchase Agreement, the purchase price for the Assets was $18 million in cash paid at closing.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2017

Accounting Policies [Abstract]

Segment Reporting, Policy [Policy Text Block]

SEGMENT INFORMATION

The Company currently operates in one business segment, which is the development of innovative therapeutics addressing cancer and other unmet medical needs for the global market. The Company is managed and operated as one business. CASI’s senior management team reports to the Board of Directors and is responsible for aligning the Company’s business strategy with its core scientific strengths, while maintaining prudent resource management, fiscal responsibility and accountability. The Company employs a drug development strategy in the United States and China to develop targeted therapeutics for the global market that are potential first-in-class or market-leading compounds for treatment of cancer.

The Company does not operate separate lines of business with respect to its product candidates. Accordingly, the Company does not have separately reportable segments as defined by authoritative guidance issued by the Financial Accounting Standards Board (FASB).

Research and Development Expense, Policy [Policy Text Block]

RESEARCH AND DEVELOPMENT

Research and development expenses consist primarily of compensation and other expenses related to research and development personnel, research collaborations, costs associated with pre-clinical correlative testing and clinical trials of the Company’s drug candidates, including the costs of manufacturing drug substance and drug product, regulatory maintenance costs, and facilities expenses. Research and development costs are expensed as incurred.

Property, Plant and Equipment, Policy [Policy Text Block]

PROPERTY AND EQUIPMENT

Furniture and equipment and leasehold improvements are stated at cost and are depreciated or amortized over their estimated useful lives of 3 to 5 years. Depreciation and amortization is determined on a straight-line basis. Depreciation and amortization expense was $117,779 and $66,451 in 2017 and 2016, respectively.

Property and equipment consists of the following:

	DECEMBER 31,
	2017		2016
Furniture and equipment	$	1,150,052	$	480,172
Leasehold improvements		268,734		11,435
		1,418,786		491,607
Less: accumulated depreciation and amortization		(372,272)		(262,016)
	$	1,046,514	$	229,591

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

IMPAIRMENT OF LONG-LIVED ASSETS

In accordance with authoritative guidance issued by the FASB, the Company periodically evaluates the value reflected in its consolidated balance sheets of long-lived assets, such as equipment, when events and circumstances indicate that the carrying amount of an asset may not be recovered. Such events and circumstances include the use of the asset in current research and development projects, any potential alternative uses of the asset in other research and development projects in the short to medium term and restructuring plans entered into by the Company. No impairment charges were recorded in 2017 and 2016.

Cash and Cash Equivalents, Policy [Policy Text Block]

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash and highly liquid investments with original maturities of less than 90 days. Substantially all of the Company’s cash equivalents are held in short-term money market accounts.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

FOREIGN CURRENCY TRANSLATION

The U.S. dollar is the functional and reporting currency of the Company. Foreign currency denominated assets and liabilities of the Company and all of its subsidiaries are translated into U.S. dollars. Accordingly, monetary assets and liabilities are translated using the exchange rates in effect at the consolidated balance sheet date and revenues and expenses at the rates of exchange prevailing when the transactions occurred. Remeasurement adjustments are included in income (loss). As discussed in Note 12, on January 26, 2018 the Company acquired a portfolio of ANDAs.  Management believes that this transaction provides significant and permanent changes to its operations in China, allowing its subsidiary in China to generate operating revenues from the China marketplace in the future and potentially to sustain their own operations without the necessity of parent support.  Accordingly, effective January 1, 2018, the functional currency of the Company’s subsidiary based in China has been changed to the local currency of the China Renminbi (“RMB”).

Expenses For Clinical Trials [Policy Text Block]

EXPENSES FOR CLINICAL TRIALS

Expenses for clinical trials are incurred from planning through patient enrollment to reporting of the data. The Company estimates expenses incurred for clinical trials that are in process based on patient enrollment and based on clinical data collection and management. Costs that are associated with patient enrollment are recognized as each patient in the clinical trial completes the enrollment process. Estimated clinical trial costs related to enrollment can vary based on numerous factors, including expected number of patients in trials, the number of patients that do not complete participation in a trial, and the length of participation for each patient. Costs that are based on clinical data collection and management are recognized in the reporting period in which services are provided. In the event of early termination of a clinical trial, the Company accrues an amount based on estimates of the remaining non-cancelable obligations associated with winding down the clinical trial. As of December 31, 2017 and 2016, clinical trial accruals were $402,773 and $499,028, respectively, and are included in accounts payable in the accompanying consolidated balance sheets.

Income Tax, Policy [Policy Text Block]

INCOME TAXES

Income tax expense is accounted for in accordance with authoritative guidance issued by the FASB. Income tax expense has been provided using the asset and liability method. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities as measured by the enacted tax rates that will be in effect when these differences reverse. The Company provides a valuation allowance against net deferred tax assets if, based upon the available evidence, it is not more likely than not that the deferred tax assets will be realized.

The Company accounts for uncertain tax positions pursuant to the guidance of FASB Accounting Standards Codification Topic 740, Income Taxes. The Company recognizes interest and penalties related to uncertain tax positions, if any, in income tax expense. As of December 31, 2017 and 2016, the Company did not accrue any interest related to uncertain tax positions. To date, there have been no interest or penalties charged to the Company in relation to the underpayment of income taxes.

Revenue Recognition, Policy [Policy Text Block]

REVENUE RECOGNITION

Revenue for product sales is not recognized until it is realized or realizable and earned. Revenue is recognized when all of the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price to the buyer is fixed and determinable and collectibility is reasonably assured.

Earnings Per Share, Policy [Policy Text Block]

NET LOSS PER SHARE

Net loss per share (basic and diluted) was computed by dividing net loss attributable to common shareholders by the weighted average number of shares of common stock outstanding. Outstanding options and warrants totaling 17,849,331 and 15,923,807 as of December 31, 2017 and 2016, respectively, were anti-dilutive and, therefore, were not included in the computation of weighted average shares used in computing diluted loss per share.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

SHARE-BASED COMPENSATION

The Company records compensation expense associated with service and performance based stock options and other equity-based compensation in accordance with provisions of authoritative guidance. The fair value of awards whose fair values are calculated using the Black-Scholes option pricing model is generally being amortized on a straight-line basis over the requisite service period and is recognized based on the proportionate amount of the requisite service period that has been rendered during each reporting period. Share-based awards granted to employees with a performance condition are measured based on the probable outcome of that performance condition during the requisite service period. Awards with performance conditions will be expensed if it is probable that the performance condition will be achieved. During the years ended December 31, 2017 and 2016, $30,500 and $10,100, respectively, of stock compensation expense was recorded for share awards with performance conditions.

New Accounting Pronouncements, Policy [Policy Text Block]

NEW ACCOUNTING PRONOUNCEMENTS

The Company has implemented all new accounting pronouncements that are in effect and that may impact the Company’s consolidated financial statements.

In January 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-01, Financial Instruments–Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. The accounting standard primarily affects the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments.  In addition, it includes a clarification related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The accounting guidance is effective for annual reporting periods (including interim periods within those periods) beginning after December 15, 2017. The Company intends to adopt ASU 2016-01 in the first quarter of 2018 and does not expect that the adoption of this ASU will have a material effect on the consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 supersedes existing lease guidance, including Accounting Standards Codification (ASC) 840 - Leases. Among other things, the new standard requires recognition of a right-of-use asset and liability for future lease payments for contracts that meet the definition of a lease. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Earlier application is permitted. The standard must be applied using a modified retrospective approach. The Company is currently evaluating the effect that the adoption of this ASU will have on its consolidated financial statements.

In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718) Scope of Modification Accounting. ASU 2017-09 provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. This ASU does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions, or award classification and would not be required if the changes are considered non-substantive. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company intends to adopt ASU 2017-09 in the first quarter of 2018 and does not expect that the adoption of this ASU will have a material effect on the consolidated financial statements.

There are no other recently issued accounting pronouncements that are expected to have a material effect on the Company’s financial position, results of operations or cash flows.

Fair Value Of Financial Instruments And Concentrations Of Risk [Policy Text Block]

FAIR VALUE OF FINANCIAL INSTRUMENTS AND CONCENTRATIONS OF CREDIT RISK

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company maintains its cash in bank deposit accounts, which, at times, may exceed federally insured amounts. The Company believes it is not exposed to significant credit risk on cash and cash equivalents. The carrying amount of current assets and liabilities approximates their fair values due to their short-term maturities.

Use of Estimates, Policy [Policy Text Block]

USE OF ESTIMATES

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company’s most critical accounting estimates relate to accounting policies for derivatives, notes payable valuation, 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 may differ from those estimates, and such differences may be material to the consolidated financial statements.

Derivatives, Policy [Policy Text Block]

DERIVATIVES

The Company entered into investment agreements with Spectrum (see Note 4) resulting in a purchase price derivative. In accordance with GAAP, derivative instruments are recognized as either assets or liabilities on the consolidated balance sheets and are measured at fair value with gains or losses recognized in earnings or other comprehensive income depending on the nature of the derivative. The Company determines the fair value of derivative instruments based on available market data using appropriate valuation models, giving consideration to all of the rights and obligations of each instrument.  The derivative liability is re-measured at fair value at the end of each reporting period as long as it is outstanding. As of December 31, 2017, the derivative liability has been settled and is no longer outstanding.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2017

Accounting Policies [Abstract]

Property, Plant and Equipment [Table Text Block]

Property and equipment consists of the following:

	DECEMBER 31,
	2017		2016
Furniture and equipment	$	1,150,052	$	480,172
Leasehold improvements		268,734		11,435
		1,418,786		491,607
Less: accumulated depreciation and amortization		(372,272)		(262,016)
	$	1,046,514	$	229,591

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FAIR VALUE MEASUREMENTS (Tables)

12 Months Ended

Dec. 31, 2017

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]

Fair Value, Liabilities Measured on Recurring Basis [Table Text Block]

The following table presents the Company’s financial liabilities accounted for at fair value on a recurring basis as of December 31, 2016 by level within the fair value hierarchy. The Contingent Rights were fully settled during 2017 resulting in a $0 fair value as of December 31, 2017.

	As of December 31, 2016
	Level 1		Level 2		Level 3		Total
Liabilities - Contingent Rights	$	-	$	-	$	4,122,266	$	4,122,266

Fair Value, Inputs, Level 3 [Member]

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

The following table presents the changes in the Company’s financial liabilities accounted for at fair value on a recurring basis using Level 3 unobservable inputs:

	2017		2016
Balance at beginning of year	$	4,122,266	$	9,395,222
Partial settlement of Contingent Rights		(4,142,157)		(5,279,744)
Change in fair value of Contingent Rights		19,891		6,788
Balance at end of year	$	-	$	4,122,266

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INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block]

For financial reporting purposes, loss before taxes includes the following components:

	2017		2016
United States	$	(8,658,120)	$	(7,375,974)
Foreign		(2,112,082)		(2,077,514)
Total	$	(10,770,202)	$	(9,453,488)

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

Deferred income taxes reflect the net effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred income tax assets and liabilities as of December 31, 2017 and 2016 are as follows:

	DECEMBER 31,
	2017		2016
Deferred income tax assets:
Net operating loss carryforwards	$	96,786,000	$	140,468,000
Research and development credit carryforward		9,592,000		9,399,000
Intangible assets		4,184,000		6,913,000
Equity-based compensation		3,812,000		5,578,000
Other		164,000		297,000
Valuation allowance for deferred income tax assets		(114,538,000)		(162,655,000)
Net deferred income tax assets	$	-	$	-

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

A reconciliation of the provision for income taxes to the federal statutory rate is as follows:

	2017		2016
Tax benefit at statutory rate	$	(3,662,000)	$	(3,214,000)
Effect of tax law change		52,258,000		-
State taxes		(290,000)		(232,000)
Net R&D credit adjustment		(185,000)		(105,000)
Attribute expiration		50,000		-
Nondeductible expenses		6,000		4,000
Change in valuation allowance		(48,117,000)		3,461,000
Other		125,000		177,000
Changes in applicable tax rates		(185,000)		(91,000)
	$	-	$	-

Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block]

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:

	2017		2016
Unrecognized tax benefits balance at January 1	$	3,133,000	$	3,097,000
Additions for Tax Positions of Prior Periods		3,000		1,000
Additions for Tax Positions of Current Period		62,000		35,000
Unrecognized tax benefits balance at December 31	$	3,198,000	$	3,133,000

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SHARE-BASED COMPENSATION AND WARRANTS (Tables)

12 Months Ended

Dec. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block]

The Company’s net loss for the years ended December 31, 2017 and 2016 includes $650,440 and $2,995,240, respectively, of non-cash compensation expense related to the Company’s share-based compensation awards. The compensation expense related to the Company’s share-based compensation arrangements is recorded as components of general and administrative expense and research and development expense, as follows:

	2017		2016
Research and development	$	271,733	$	746,027
General and administrative		378,707		2,249,213
Share-based compensation expense	$	650,440	$	2,995,240
Net share-based compensation expense, per common share:
Basic and diluted	$	0.01	$	0.05

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

Following are the weighted-average assumptions used in valuing the stock options granted to employees during the years ended December 31, 2017 and 2016:

	Years ended December 31,
	2017			2016
Expected volatility		78.88	%		82.12	%
Risk free interest rate		1.96	%		1.29	%
Expected term of option		6.29 years			5.33 years
Forfeiture rate		-			*3.00	%
Expected dividend yield		-			-

*- In 2016, authoritative guidance required forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Throughout 2016, forfeitures were estimated at 3% and the actual forfeiture rate was 6% for 2016. The Company adjusted stock compensation expense for 2016 based on the actual forfeiture rate.

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

A summary of the Company’s stock option plans and of changes in options outstanding under the plans during the years ended December 31, 2017 and 2016 is as follows:

					Weighted Average
			Weighted Average		Remaining		Aggregate Intrinsic
	Number of Options		Exercise Price		Contractual Term		Value
					In Years
Outstanding at December 31, 2015		6,694,744	$	1.99
Exercised		-	$	-
Granted		4,213,518	$	1.00
Expired		(856,512)	$	2.24
Forfeited		(516,444)	$	1.14
Outstanding at December 31, 2016		9,535,306	$	1.57
Exercised		(154,545)	$	2.11
Granted		3,199,500	$	1.05
Expired		(978,070)	$	1.64
Forfeited		(16,876)	$	0.92
Outstanding at December 31, 2017		11,585,315	$	1.42		7.46	$	21,730,182
Exercisable at December 31, 2017		8,468,971	$	1.57		6.78	$	14,781,148

Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block]

The following summarizes information about stock options granted to employees and directors outstanding at December 31, 2017:

	Options Outstanding						Options Exercisable
			Weighted
			Average		Weighted				Weighted
	Number		Remaining		Average		Number		Average
Range of	Outstanding at		Contractual		Exercise		Exercisable at		Exercise
Exercise Prices	December 31, 2017		Life in Years		Price		December 31, 2017		Price
$0.00 - $1.00		3,950,656		8.9	$	0.93		1,538,965	$	0.87
$1.01 - $2.00		7,083,119		7.0	$	1.53		6,378,466	$	1.57
$2.01 - $3.00		375,000		4.2	$	2.24		375,000	$	2.24
$3.01 - $7.00		122,000		3.0	$	6.24		122,000	$	6.24
$7.01 - $8.00		54,540		1.5	$	7.26		54,540	$	7.26
		11,585,315		7.5	$	1.42		8,468,971	$	1.57

Schedule Of Warrant Activity [Table Text Block]

Warrants issued generally expire after 2-5 years from the date of issuance. Stock warrant activity is as follows:

			Weighted Average
	Number of Shares		Exercise Price
Outstanding at December 31, 2015		4,010,903	$	2.27
Issued		4,625,510	$	1.69
Exercised		-	$	-
Expired		(2,247,912)	$	2.91
Outstanding at December 31, 2016		6,388,501	$	1.60
Issued		1,638,506	$	3.75
Exercised		-	$	-
Expired		(1,762,991)	$	1.46
Outstanding at December 31, 2017		6,264,016	$	2.23
Exercisable at December 31, 2017		4,625,510	$	1.69

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COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

The future minimum payments under its facilities leases are as follows:

2018	$	337,030
2019		259,459
2020		183,378
2021		191,691
2022		44,172
Thereafter		-
Total minimum payments	$	1,015,730

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DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details Textual) - USD ($)	1 Months Ended			2 Months Ended	9 Months Ended
	Mar. 29, 2018	Oct. 17, 2017	Jun. 24, 2016	Nov. 20, 2017	Dec. 31, 2018	Mar. 31, 2018	Mar. 19, 2018	Dec. 31, 2017	Dec. 31, 2016
Description of Business and Basis of Presentation [Line Items]
Retained Earnings (Accumulated Deficit), Total								$ (452,702,029)	$ (441,931,827)
Percentage Of Ownership Interest In Non Stock Subsidiary								100.00%
Investors [Member]
Description of Business and Basis of Presentation [Line Items]
Proceeds From Issuance Of Common Stock Gross		$ 23,800,000
Second Closing [Member]
Description of Business and Basis of Presentation [Line Items]
Proceeds from Issuance of Common Stock			$ 6,000,000
Net Proceeds From Issuance Of Common Stock				$ 23,400,000
Subsequent Event [Member]
Description of Business and Basis of Presentation [Line Items]
Proceeds from Issuance of Common Stock	$ 29,300,000
Class of Warrant or Right, Number of Securities Called by Warrants or Rights						6,172,832	6,172,832
Net Proceeds From Issuance Of Common Stock	$ 475,000
Subsequent Event [Member] | Private Placement [Member]
Description of Business and Basis of Presentation [Line Items]
Stock And Warrants To Be Issued Value							$ 50,000,000
Scenario, Forecast [Member]
Description of Business and Basis of Presentation [Line Items]
Additional Gross Proceeds From Issuance Of Common Stock To Be Received					$ 20,700,000
Stock To Be Issued, Shares							15,432,091
CASI China [Member]
Description of Business and Basis of Presentation [Line Items]
Cash								$ 12,200,000

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Property, Plant and Equipment [Line Items]
Furniture and equipment	$ 1,150,052	$ 480,172
Leasehold improvements	268,734	11,435
Property, Plant and Equipment, Gross	1,418,786	491,607
Less: accumulated depreciation and amortization	(372,272)	(262,016)
Property, Plant and Equipment, Net	$ 1,046,514	$ 229,591

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Accounting Policies [Line Items]
Clinical Trial Accruals	$ 402,773	$ 499,028
Depreciation	117,779	66,451
Allocated Share-based Compensation Expense	$ 30,500	$ 10,100
Options And Warrants [Member]
Accounting Policies [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	17,849,331	15,923,807
Minimum [Member]
Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	3 years
Maximum [Member]
Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life	5 years

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RELATED PARTY TRANSACTIONS (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Research and Development Expense, Total	$ 7,595,182	$ 4,645,560
Accounts Payable, Related Parties, Current	2,228,366	0
Spectrum [Member]
Research and Development Expense, Total	2,705,000	$ 155,220
Accounts Payable, Related Parties, Current	$ 2,228,366

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LICENSE ARRANGEMENTS (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2014	Dec. 31, 2015
License Arrangements [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliations, Recurring Basis, Liability Value	$ 0	$ 4,122,266		$ 9,395,222
Notes Payable, Noncurrent	1,498,754	1,491,278
Licensing Agreements [Member]
License Arrangements [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliations, Recurring Basis, Liability Value	0	$ 4,122,266
Spectrum [Member]
License Arrangements [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliations, Recurring Basis, Liability Value	$ 0
Stock Issued During Period, Shares, New Issues	1,519,096	4,623,197
Adjustments to Additional Paid in Capital, Stock Issued for Liability	$ 4,142,157	$ 5,279,744
Spectrum Pharmaceuticals [Member]
License Arrangements [Line Items]
Contingent Consideration Fair Value Of License			$ 19,700,000
Stock Issued During Period, Shares, Acquisitions			5,405,382
Debt Instrument, Interest Rate, Stated Percentage	0.50%
Notes Payable, Noncurrent	$ 1,500,000
Contingent Rights Expiration	These Contingent Rights will expire on the earlier of raising an aggregate of $50 million or September 17, 2019 (subject to possible extension only for certain outstanding derivative securities).
Aggregate Amount Of Funds Raised Before Contingent Rights Expire	$ 50,000,000

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NOTE PAYABLE (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Notes Payable [Line Items]
Amortization of Debt Discount (Premium)	$ 7,000	$ 26,000
Spectrum Pharmaceuticals [Member]
Notes Payable [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	0.50%
Debt Instrument Initial Discount Upon Issuance	$ 136,000
Debt Instrument, Face Amount	$ 1,500,000

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FAIR VALUE MEASUREMENTS (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Liabilities - Contingent Rights	$ 0	$ 4,122,266	$ 9,395,222
Fair Value, Inputs, Level 1 [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Liabilities - Contingent Rights		0
Fair Value, Inputs, Level 2 [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Liabilities - Contingent Rights		0
Fair Value, Inputs, Level 3 [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Liabilities - Contingent Rights		$ 4,122,266

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FAIR VALUE MEASUREMENTS (Details 1) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance at beginning of year	$ 4,122,266	$ 9,395,222
Partial settlement of Contingent Rights	(4,142,157)	(5,279,744)
Change in fair value of Contingent Rights	19,891	6,788
Balance at end of year	$ 0	$ 4,122,266

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FAIR VALUE MEASUREMENTS (Details Textual) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Derivative Liability, Noncurrent	$ 0	$ 4,122,266

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INCOME TAXES (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
United States	$ (8,658,120)	$ (7,375,974)
Foreign	(2,112,082)	(2,077,514)
Total	$ (10,770,202)	$ (9,453,488)

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INCOME TAXES (Details 1) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Deferred income tax assets:
Net operating loss carryforwards	$ 96,786,000	$ 140,468,000
Research and development credit carryforward	9,592,000	9,399,000
Intangible assets	4,184,000	6,913,000
Equity based compensation	3,812,000	5,578,000
Other	164,000	297,000
Valuation allowance for deferred income tax assets	(114,538,000)	(162,655,000)
Net deferred income tax assets	$ 0	$ 0

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INCOME TAXES (Details 2) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Effective Income Tax Rate Reconciliation Line Items [Line Items]
Tax benefit at statutory rate	$ (3,662,000)	$ (3,214,000)
Effect of tax law change	52,258,000	0
State taxes	(290,000)	(232,000)
Net R&D credit adjustment	(185,000)	(105,000)
Attribute expiration	50,000	0
Nondeductible expenses	6,000	4,000
Change in valuation allowance	(48,117,000)	3,461,000
Other	125,000	177,000
Changes in applicable tax rates	(185,000)	(91,000)
Total	$ 0	$ 0

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INCOME TAXES (Details 3) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Schedule Of Unrecognized Tax Benefits Roll Forward [Line Items]
Unrecognized tax benefits balance at January 1	$ 3,133,000	$ 3,097,000
Additions for Tax Positions of Prior Periods	3,000	1,000
Additions for Tax Positions of Current Period	62,000	35,000
Unrecognized tax benefits balance at December 31	$ 3,198,000	$ 3,133,000

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INCOME TAXES (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income Tax Contingency [Line Items]
Unrecognized Tax Benefits		$ 3,198,000	$ 3,133,000	$ 3,097,000
Operating Loss Carryforwards		$ 368,134,000
Operating Loss Carryforwards Expiration Period		expire in years 2018 through 2038
Operating Loss Carryforwards, Limitations on Use		NOL and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50%
Effective Income Tax Rate Reconciliation, Effect of tax law change , Amount		$ 52,258,000	0
Scenario, Forecast [Member]
Income Tax Contingency [Line Items]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	21.00%
UNITED STATES
Income Tax Contingency [Line Items]
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest		(8,658,120)
CHINA
Income Tax Contingency [Line Items]
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest		(2,112,082)
Research Tax Credit Carryforward [Member]
Income Tax Contingency [Line Items]
Unrecognized Tax Benefits		65,000	$ 3,133,000
Tax Credit Carryforward, Amount		$ 9,593,000

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STOCKHOLDERS' EQUITY (Details Textual) - USD ($)					1 Months Ended							2 Months Ended	9 Months Ended	12 Months Ended
	Oct. 13, 2017	Oct. 03, 2016	Jul. 05, 2016	Jan. 15, 2016	Mar. 29, 2018	Mar. 19, 2018	Feb. 23, 2018	Nov. 20, 2017	Oct. 24, 2016	Jun. 24, 2016	Sep. 20, 2015	Nov. 20, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Mar. 31, 2018
Percentage of Warrant Coverage On Purchase Price									20.00%
Class Of Warrant Or Right Maturity Period Description									The warrants became exercisable on January 23, 2017 at $1.69 per share exercise price, and will expire on January 23, 2020.
Fair Value Of Warrant Issued									$ 306,173
Fair Value Assumptions Fair Value									$ 0.62
Fair Value Assumptions, Expected Term									3 years 3 months
Fair Value Assumptions, Risk Free Interest Rate									1.00%
Fair Value Assumptions, Expected Volatility Rate									72.20%
Warrants Issued									493,827
Sale of Stock, Price Per Share									$ 1.190
Proceeds from Issuance or Sale of Equity									$ 3,000,000
Common Stock, Shares, Issued									2,469,135					69,901,625	60,276,119
Stock Issued During Period, Value, Other														$ 23,884,475	$ 28,100,000
Price Per Share and Warrant									$ 0.125
Scenario, Forecast [Member]
Stock To Be Issued, Shares						15,432,091
Additional Gross Proceeds From Issuance Of Common Stock To Be Received													$ 20,700,000
Investors [Member]
Stock To Be Issued, Shares											20,658,434
Shares Issued, Price Per Share											$ 1.19
Percentage of Warrant Coverage On Purchase Price											20.00%
Class Of Warrant Or Right Maturity Period Description											The warrants became exercisable three months after issuance at $1.69 per share exercise price, and expire three years from the date the warrants become exercisable.
Warrants To Be Issued											4,131,686
Stock And Warrants To Be Issued Value											$ 25,100,000
Price Per Share and Warrant											$ 0.125
Subsequent Event [Member]
Proceeds from Issuance of Common Stock					$ 29,300,000
Net Proceeds From Issuance Of Common Stock					$ 475,000
Class of Warrant or Right, Number of Securities Called by Warrants or Rights						6,172,832										6,172,832
Stock Issued During Period, Shares, New Issues					143,248
Warrant Term						5 years
Price Per Share and Warrant						$ 3.24
Subsequent Event [Member] | Investors [Member]
Class of Warrant or Right, Exercise Price of Warrants or Rights						$ 3.69
Subsequent Event [Member] | H.C. Wainwright Co., LLC [Member]
Commision Precentage on Gross Sale Price							3.00%
Subsequent Event [Member] | H.C. Wainwright Co., LLC [Member] | Maximum [Member]
Aggregate Sales Price							$ 25,000,000
Second Closing [Member]
Class Of Warrant Or Right Maturity Period Description										The warrants became exercisable on September 23, 2016 at $1.69 per share exercise price, and will expire on September 23, 2019
Fair Value Of Warrant Issued										$ 431,738
Fair Value Assumptions Fair Value										$ 0.44
Fair Value Assumptions, Expected Term										3 years 3 months
Fair Value Assumptions, Risk Free Interest Rate										0.76%
Fair Value Assumptions, Expected Volatility Rate										70.40%
Warrants Issued										981,223
Proceeds from Issuance of Common Stock										$ 6,000,000
Sale of Stock, Number of Shares Issued in Transaction										4,906,118
Sale of Stock, Price Per Share										$ 1.19
Net Proceeds From Issuance Of Common Stock												$ 23,400,000
Price Per Share and Warrant										$ 0.125
First Closing [Member]
Shares Issued, Price Per Share				$ 1.19
Class Of Warrant Or Right Maturity Period Description				The warrants became exercisable on April 15, 2016 at $1.69 per share exercise price, and will expire on April 15, 2019.
Fair Value Of Warrant Issued				$ 321,047
Fair Value Assumptions Fair Value				$ 0.19
Fair Value Assumptions, Expected Term				3 years 3 months
Fair Value Assumptions, Risk Free Interest Rate				1.08%
Fair Value Assumptions, Expected Volatility Rate				70.10%
Warrants Issued				1,689,722
Proceeds from Issuance of Common Stock				$ 10,300,000
Sale of Stock, Number of Shares Issued in Transaction				8,448,613
Net Proceeds From Issuance Of Common Stock				$ 10,200,000
Price Per Share and Warrant				$ 0.125
Third Closing [Member]
Class Of Warrant Or Right Maturity Period Description			The warrants became exercisable on October 4, 2016 at $1.69 per share exercise price, and will expire on October 4, 2019.
Fair Value Of Warrant Issued			$ 67,490
Fair Value Assumptions Fair Value			$ 0.41
Fair Value Assumptions, Expected Term			3 years 3 months
Fair Value Assumptions, Risk Free Interest Rate			0.66%
Fair Value Assumptions, Expected Volatility Rate			70.60%
Warrants Issued			164,609
Proceeds from Issuance of Common Stock			$ 1,000,000
Sale of Stock, Number of Shares Issued in Transaction			823,045
Sale of Stock, Price Per Share			$ 1.19
Price Per Share and Warrant			$ 0.125
Final Closing [Member]
Class Of Warrant Or Right Maturity Period Description		The warrants became exercisable on January 2, 2017 at $1.69 per share exercise price, and will expire on January 2, 2020.
Fair Value Of Warrant Issued		$ 544,374
Fair Value Assumptions Fair Value		$ 0.42
Fair Value Assumptions, Expected Term		3 years 3 months
Fair Value Assumptions, Risk Free Interest Rate		0.91%
Fair Value Assumptions, Expected Volatility Rate		71.40%
Warrants Issued		1,296,129
Proceeds from Issuance of Common Stock		$ 7,800,000
Sale of Stock, Number of Shares Issued in Transaction		6,480,655
Sale of Stock, Price Per Share		$ 1.19
Price Per Share and Warrant		$ 0.125
Securities Purchase Agreements [Member]
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 3.75
Fair Value Of Warrant Issued	$ 1,558,566
Fair Value Assumptions Fair Value	$ 0.98
Fair Value Assumptions, Expected Term	2 years 6 months
Fair Value Assumptions, Risk Free Interest Rate	1.54%
Fair Value Assumptions, Expected Volatility Rate	85.40%
Proceeds from Issuance of Common Stock								$ 23,855,595
Sale of Stock, Price Per Share	$ 3.00
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	1,590,373
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right	0.20
Class Of Warrant Or Right Expiration Date	Apr. 17, 2018
Class of Warrant or Right, Date from which Warrants or Rights Exercisable	Apr. 17, 2020
Stock Issued During Period, Value, Other	$ 23,400,000
Stock Issued During Period								7,951,865
Securities Purchase Agreements [Member] | Agent Warrants [Member]
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 3.75
Fair Value Of Warrant Issued	$ 28,880
Fair Value Assumptions Fair Value	$ 0.60
Fair Value Assumptions, Expected Term	1 year 6 months
Fair Value Assumptions, Risk Free Interest Rate	1.54%
Fair Value Assumptions, Expected Volatility Rate	77.80%
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	48,133
Class Of Warrant Or Right Expiration Date	Apr. 17, 2018
Class of Warrant or Right, Date from which Warrants or Rights Exercisable	Apr. 17, 2019
Agent Warrants Percentage	4.00%
Private Placement [Member] | Subsequent Event [Member]
Stock And Warrants To Be Issued Value						$ 50,000,000

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SHARE-BASED COMPENSATION AND WARRANTS (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 650,440	$ 2,995,240	$ 2,995,240
Net share-based compensation expense, per common share:
Basic and diluted (in dollars per share)	$ 0.01	$ 0.05
Research and Development Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 271,733	$ 746,027
General and Administrative Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 378,707	$ 2,249,213

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SHARE-BASED COMPENSATION AND WARRANTS (Details 1)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility	78.88%	82.12%
Risk-free interest rate	1.96%	1.29%
Expected term of option	6 years 3 months 14 days	5 years 3 months 29 days
Forfeiture rate	0.00%	3.00%	[1]
Expected dividend yield	0.00%	0.00%

[1] In 2016, authoritative guidance required forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Throughout 2016, forfeitures were estimated at 3% and the actual forfeiture rate was 6% for 2016. The Company adjusted stock compensation expense for 2016 based on the actual forfeiture rate.

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SHARE-BASED COMPENSATION AND WARRANTS (Details 2) - Employee Stock Option [Member] - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding - Number of Options, Beginning Balance	9,535,306	6,694,744
Exercised - Number of Options	(154,545)	0
Granted - Number of Options	3,199,500	4,213,518
Expired - Number of Options	(978,070)	(856,512)
Forfeited - Number of Options	(16,876)	(516,444)
Outstanding - Number of Options, Ending Balance	11,585,315	9,535,306
Exercisable - Number of Options	8,468,971
Outstanding - Weighted Average Exercise Price, Beginning balance	$ 1.57	$ 1.99
Exercised - Weighted Average Exercise Price	2.11	0
Granted - Weighted Average Exercise Price	1.05	1
Expired - Weighted Average Exercise Price	1.64	2.24
Forfeited - Weighted Average Exercise Price	0.92	1.14
Outstanding - Weighted Average Exercise Price, Ending Balance	1.42	$ 1.57
Exercisable - Weighted Average Exercise Price	$ 1.57
Outstanding - Weighted Average Remaining Contractual Term In Years	7 years 5 months 16 days
Exercisable - Weighted Average Remaining Contractual Term In Years	6 years 9 months 11 days
Outstanding - Aggregate Intrinsic Value	$ 21,730,182
Exercisable - Aggregate Intrinsic Value	$ 14,781,148

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SHARE-BASED COMPENSATION AND WARRANTS (Details 3)	12 Months Ended
	Dec. 31, 2017 $ / shares shares
Number Of Options Outstanding at December 31,2017 | shares	11,585,315
Number Of Options Outstanding Weighted Average Remaining Contractual Life in Years	7 years 6 months
Number Of Options Outstanding Weighted Average Exercise Price	$ 1.42
Number Of Options Exercisable at December 31, 2017 | shares	8,468,971
Number Of Options Exercisable Weighted Average Exercise Price	$ 1.57
Range One [Member]
Range of Exercise Prices Lower Range Limit	0.00
Range of Exercise Prices Upper Range Limit	$ 1.00
Number Of Options Outstanding at December 31,2017 | shares	3,950,656
Number Of Options Outstanding Weighted Average Remaining Contractual Life in Years	8 years 10 months 24 days
Number Of Options Outstanding Weighted Average Exercise Price	$ 0.93
Number Of Options Exercisable at December 31, 2017 | shares	1,538,965
Number Of Options Exercisable Weighted Average Exercise Price	$ 0.87
Range Two [Member]
Range of Exercise Prices Lower Range Limit	1.01
Range of Exercise Prices Upper Range Limit	$ 2.00
Number Of Options Outstanding at December 31,2017 | shares	7,083,119
Number Of Options Outstanding Weighted Average Remaining Contractual Life in Years	7 years
Number Of Options Outstanding Weighted Average Exercise Price	$ 1.53
Number Of Options Exercisable at December 31, 2017 | shares	6,378,466
Number Of Options Exercisable Weighted Average Exercise Price	$ 1.57
Range Three [Member]
Range of Exercise Prices Lower Range Limit	2.01
Range of Exercise Prices Upper Range Limit	$ 3.00
Number Of Options Outstanding at December 31,2017 | shares	375,000
Number Of Options Outstanding Weighted Average Remaining Contractual Life in Years	4 years 2 months 12 days
Number Of Options Outstanding Weighted Average Exercise Price	$ 2.24
Number Of Options Exercisable at December 31, 2017 | shares	375,000
Number Of Options Exercisable Weighted Average Exercise Price	$ 2.24
Range Four [Member]
Range of Exercise Prices Lower Range Limit	3.01
Range of Exercise Prices Upper Range Limit	$ 7.00
Number Of Options Outstanding at December 31,2017 | shares	122,000
Number Of Options Outstanding Weighted Average Remaining Contractual Life in Years	3 years
Number Of Options Outstanding Weighted Average Exercise Price	$ 6.24
Number Of Options Exercisable at December 31, 2017 | shares	122,000
Number Of Options Exercisable Weighted Average Exercise Price	$ 6.24
Range Five [Member]
Range of Exercise Prices Lower Range Limit	7.01
Range of Exercise Prices Upper Range Limit	$ 8.00
Number Of Options Outstanding at December 31,2017 | shares	54,540
Number Of Options Outstanding Weighted Average Remaining Contractual Life in Years	1 year 6 months
Number Of Options Outstanding Weighted Average Exercise Price	$ 7.26
Number Of Options Exercisable at December 31, 2017 | shares	54,540
Number Of Options Exercisable Weighted Average Exercise Price	$ 7.26

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SHARE-BASED COMPENSATION AND WARRANTS (Details 4) - Warrant [Member] - $ / shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Outstanding at Number of Warrants, Beginning Balance	6,388,501	4,010,903
Issued Number of Warrants	1,638,506	4,625,510
Exercised Number of Warrants	0	0
Expired Number of Warrants	(1,762,991)	(2,247,912)
Outstanding at Number of Warrants, Ending Balance	6,264,016	6,388,501
Exercisable Number of Warrants	4,625,510
Outstanding Weighted Average Exercise Price, Beginning Balance	$ 1.60	$ 2.27
Issued Weighted Average Exercise Price	3.75	1.69
Exercised Weighted Average Exercise Price	0	0
Expired Weighted Average Exercise Price	1.46	2.91
Outstanding Weighted Average Exercise Price, at Ending Balance	2.23	$ 1.60
Exercisable Weighted Average Exercise Price	$ 1.69

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SHARE-BASED COMPENSATION AND WARRANTS (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Mar. 13, 2018	Jun. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 0.73	$ 0.75
Share-based Compensation, Total	$ 650,440	$ 2,995,240	$ 2,995,240
Allocated Share-based Compensation Expense	30,500	10,100
Proceeds from Stock Options Exercised	325,999	0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value	168,000
Unrecognized Share Based Compensation Cost Expected To Be Recognized Over Weighted Average Period	$ 544,000
Unrecognized Share Based Compensation Cost Expected To Be Recognized Over Weighted Average Period	1 year 9 months 18 days
Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated Share-based Compensation Expense	$ 30,500	$ 10,100
Certain Board Members Officers And Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share Based Compensation Arrangement By Share Based Payment Award Options Granted Subject To Achievement	2,225,000
Executive Chairman [Member] | Subsequent Event [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number				1,000,000
Executive Chairman [Member] | Performance Based Option [Member] | Subsequent Event [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number				4,000,000
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Granted Expire Terms	5 years
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Granted Expire Terms	2 years
Long Term Incentive Plan2011 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant	2,852,234
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance	11,585,315
Long Term Incentive Plan2011 [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant					14,230,000
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit	$ 7.37
Long Term Incentive Plan2011 [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant					11,230,000
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit	$ 0.86

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COMMITMENTS AND CONTINGENCIES (Details)	Dec. 31, 2017 USD ($)
2018	$ 337,030
2019	259,459
2020	183,378
2021	191,691
2022	44,172
Thereafter	0
Total minimum payments	$ 1,015,730

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COMMITMENTS AND CONTINGENCIES (Details Textual) - USD ($)	1 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2010	Dec. 31, 2008
Purchase obligation to purchase materials		$ 300,000
Operating Leases, Rent Expense		440,000	$ 328,000
Subsequent Event [Member]
Purchase obligation to purchase materials	$ 5,500,000
Phase One [Member]
Business Combination Consideration Milestone Achievement					$ 2,000,000
Phase Two [Member]
Business Combination Consideration Milestone Achievement				$ 3,000,000
Phase Three [Member]
Payable And Contingent Upon Certain Milestones		$ 4,000,000

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EMPLOYEE RETIREMENT PLAN (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Defined Benefit Plan, Contributions by Employer	$ 70,167	$ 30,300

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SUBSEQUENT EVENT (Details Textual) $ in Millions	1 Months Ended
	Jan. 26, 2018 USD ($)
Sandoz Inc [Member] | Subsequent Event [Member]
Payments to Acquire Intangible Assets	$ 18