On November 12, 2019 Lipocine Inc. (NASDAQ: LPCN), a clinical-stage biopharmaceutical company, reported financial results for the third quarter and nine months ended September 30, 2019, and provided a corporate update (Press release, Lipocine, NOV 12, 2019, View Source [SID1234551019]).

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Third Quarter and Recent Corporate Highlights

TLANDO, our oral testosterone replacement therapy ("TRT") product, received a Complete Response Letter ("CRL") from the United Stated Food and Drug Administration ("FDA") on November 8, 2019
First patient has been dosed in LiFT ("Liver Fat intervention with oral Testosterone") Phase 2 clinical study of LPCN 1144 in confirmed pre-cirrhotic non-alcoholic steatohepatitis ("NASH") subjects.
The LiFT Phase 2 clinical study is a prospective, multi-center, randomized, double-blind, placebo-controlled multiple-arm study in biopsy-confirmed male NASH subjects with grade F2/F3 fibrosis and a NAFLD Activity Score ("NAS") ≥ 4 with a 36-week treatment period.
Top-line primary end point liver fat reduction data are currently expected in mid-2020, as measured by MRI-PDFF at 12 weeks, followed by 36-week biopsy data.
Data from a clinical trial of LPCN 1144 in non-alcoholic fatty liver disease ("NAFLD") were selected for presentation at The Liver Meeting 2019, held November 8th – 12th in Boston, MA.
Lipocine’s abstract was selected by the Scientific Program Committee of the American Association for the Study of Liver Disease ("AASLD") as a Poster of Distinction for presentation.
Four abstracts (two oral presentations and two poster presentation on TLANDO) were presented at the 20th Annual Fall Meeting of the Sexual Medicine Society of North America ("SMSNA"), October 24-27th in Nashville, TN.
The U.S. District Court of Delaware has set a trial date for Lipocine’s patent infringement lawsuit against Clarus’s JATENZO drug product relating to six of Lipocine’s U.S. patents.
Trial is set to begin August 24, 2020 at which time Lipocine plans to seek a permanent injunction for Clarus’s infringement.
"During the third quarter, we continued to advance our pipeline, with important milestones achieved," said Dr. Mahesh Patel, Chairman, President and Chief Executive Officer of Lipocine. "We are excited to continue enrolling subjects in the ongoing LPCN 1144 LiFT clinical study and look forward to participating in the TLANDO Post Action meeting with FDA to discuss a potential path forward for the approval of TLANDO while reserving our right to request for formal dispute resolution," said Dr. Mahesh Patel.

Third Quarter Ended September 30, 2019 Financial Results

Lipocine reported a net loss of $3.1 million, or ($0.12) per diluted share, for the quarter ended September 30, 2019, compared with a net loss of $2.5 million, or ($0.12) per diluted share, in the quarter ended September 30, 2018.

License revenue was $165,000 during the three months ended September 30, 2019 compared to no license revenue being recognized during the three months ended September 30, 2018. License revenue in 2019 relates to royalty payments received from Spriaso, LLC ("Spriaso") under a licensing agreement in the cough and cold field.

Research and development expenses were $1.7 million for the quarter ended September 30, 2019, compared with $1.4 million for the quarter ended September 30, 2018. The increase in research and development expenses was primarily due to increases in outside service costs related to the ramping up of the LPCN 1144 LiFT Phase 2 clinical study and increases in other research and development costs, offset by decreased contract research organization and outside consulting costs for TLANDO in connection with the completion of the ABPM study and filing of the NDA and a decrease in personnel costs. The decrease in personnel costs primarily relate to decreased stock compensation expense which resulted from the reversal of stock-based compensation expense recorded for the expected vesting of restricted stock units upon the approval of TLANDO (previously estimated to vest in the fourth quarter of 2019). The decrease in stock-based compensation expense was offset by increased salaries and other personnel expenses.

General and administrative expenses were $1.4 million for the quarter ended September 30, 2019, compared with $0.9 million for the quarter ended September 30, 2018. The increase in general and administrative was primarily due to an increase in legal fees mainly due to the lawsuit filed against Clarus for patent infringement and increases in other general and administrative expenses, offset by a decrease in personnel costs attributable to the reversal of stock-based compensation expense recorded for the expected vesting of restricted stock units upon the approval of TLANDO (previously estimated to vest in the fourth quarter of 2019).

As of September 30, 2019, the Company had unrestricted cash, cash equivalents and marketable securities aggregating $11.5 million, compared to $15.3 million at December 31, 2018. Additionally, as of September 30, 2019 and December 31, 2018 the Company had $5.0 million of restricted cash, which is required to be maintained as cash collateral under the Loan and Security Agreement with Silicon Valley Bank until TLANDO is approved by the FDA.

Nine Months Ended September 30, 2019 Financial Results

Lipocine reported a net loss of $9.7 million, or ($0.40) per diluted share, for the nine months ended September 30, 2019, compared with a net loss of $8.4 million, or ($0.40) per diluted share, in the nine months ended September 30, 2018.

License revenue was $165,000 during the nine months ended September 30, 2019 compared to license revenue of $428,000 during the three months ended September 30, 2018. License revenue in both 2019 and 2018 relates to royalty payments received from Spriaso under a licensing agreement in the cough and cold field.

Research and development expenses were $5.6 million for the nine months ended September 30, 2019, compared with $4.3 million for the nine months ended September 30, 2018. The increase in research and development expenses was primarily due to increases in the following costs: contract research organization and outside consulting costs for TLANDO in connection with completion of the ABPM study and the filing of the NDA, increased manufacturing costs for TLANDO, increased outside service costs related to the second quarter initiation of the LPCN 1144 LiFT Phase 2 clinical study, increased outside contract research organization costs related to TLANDO XR (LPCN 1111), increases in miscellaneous other research and development expenses and increased personnel costs. These cost increases were offset by a decrease in personnel costs attributable primarily to the reversal of stock-based compensation expense recorded for the expected vesting of restricted stock units upon the approval of TLANDO (previously estimated to vest in the fourth quarter of 2019) and decreased contract manufacturing costs for LPCN 1107.

General and administrative expenses were $4.0 million for the quarter ended September 30, 2019, compared with $4.3 million for the quarter ended September 30, 2018. The decrease in general and administrative was primarily due to decreased personnel costs, including decreased salaries and benefits due to the elimination of our commercial sales and marketing team in 2018, a decrease in severance compensation, and a net decrease in stock-based compensation mainly due to reversal of stock-based compensation expense recorded for the expected vesting of restricted stock units upon the approval of TLANDO (previously estimated to vest in the fourth quarter of 2019) and increases in other general and administrative expenses. These decreases in personnel costs and other general and administrative expenses were offset by increases in legal fees mainly due to the lawsuit filed against Clarus for patent infringement and increases in corporate insurance.