LPCN: 2022 Operational & Financial Update

·10 min read

By John Vandermosten, CFA



2022 was an eventful year for Lipocine Inc (NASDAQ:LPCN) with both product and strategy achievements. The company’s first developed product, Tlando, launched in 2022 following a March 2022 FDA approval. Other material events in the year include the shift in strategy to focus on the development of treatments for central nervous system (CNS) disorders, particularly neuroactive steroids. The company also has several other developed assets that have passed the proof-of-concept stage and are available for partnering. It has completed enrollment of the Phase II decompensated cirrhosis asset LPCN 1148 with topline expected mid-2023. Work on the neuroactive steroids program has been ongoing with completion of an oral pharmacokinetic (PK) and food study for LPCN 1154 (brexanalone) leading to a pilot PK bridge study as the subsequent step.

On March 10, 2022 Lipocine filed its 2022 Form 10-K and posted its earnings release for the year ending December 31, 2022.

Highlights for 2022 and to-date include:

➢ TLANDO approved – March 2022

➢ LPCN 1144 end of Phase II meeting with FDA – July 2022

➢ LPCN 2101 IND cleared – July 2022

➢ LPCN 1154 (post-partum depression) pathway to approval clarified – September 2022

➢ Strategic realignment towards CNS disorders – September 2022

Addition of new CMO and Lead Director/Board Chairman – November 2022

➢ Enrollment completion of LPCN 1148 decompensated cirrhosis study – December 2022

Lipocine generated revenues of $0.5 million for 2022 and posted a net loss of ($10.8) million, or ($0.12) per diluted share.

For the year ending December 31, 2022 and versus the same period in the prior year:

➢ Revenues were ($0.5) million compared to $16.1 million. The amounts reflect a payment from Antares for an extension on its option to license LPCN 1111 in the most recent year. 2021 amounts were predominantly composed of license revenues licensing fees, minimum royalties and the sale of finished goods inventory related to Antares Tlando agreement and $55,000 relating to payments made by Spriaso for a legacy license that Lipocine holds in the cough and cold field;

➢ Research & Development expense totaled $8.6 million, rising 12% from $7.7 million. The increase was driven by contract research organization expense related to LPCN 1148, LPCN 1111 manufacturing scale up costs, personnel expense and other R&D expenses. Offsets arose from lower LPCN 1144 consulting costs related to the LiFT study, less spend on the LPCN 1107 study and a decrease in costs related to LPCN 1154;

➢ General & Administrative expenses were $4.1 million, down 24% from $5.3 million primarily due to lower legal fees relating to the patent infringement lawsuit with Clarus in 2021, decreased personnel related costs and a fall in other general and administrative expenses. Offsets to the upside arose from expenses related to the recruitment and compensation for two additional directors, other professional fees, strategic advisory services, proxy solicitation services and travel related costs;

➢ Total other net income was $1.4 million compared to a ($3.8) million loss. Higher interest and gains on warrant and settlement liabilities contributed to the 2022 gain while the litigation settlement in 2021 was the primary contributor to the loss in the prior year;

➢ Net loss was ($10.8) million or ($0.12) per share compared with net loss of ($0.6) million or ($0.01) per share, respectively.

At year’s end, marketable securities, cash and equivalents totaled $32.5 million. Cash burn for 2022 was ($12.1) million, compared with ($4.4) million in 2021. During the year, financing cash flows were ($2.1) million, representing a ($1.7) million debt repayment and a ($0.7) million repayment fee partially offset by proceeds from stock options. Of note is the recent bank failures, in particular Silicon Valley Bank (SVB), which has held a previous lending agreement with Lipocine. Following the appointment of the Federal Deposit Insurance Corporation (FDIC) as receiver, the company filed an 8-K reporting that the relationship is now minimal and that the closure of SVB is not expected to have a material impact on the business, liquidity position or operational results. No material cash deposits are held at SVB. SVB does manage Lipocine’s marketable securities; however, the securities are held in custody at U.S. Bank. Lipocine is working with U.S. Bank to identify a new manager and does not believe that the troubles at SVB will affect access to its assets. Additionally, the FDIC has guaranteed all funds held at the bank, including those that exceed the $250,000 limit. Based on this guarantee and the minimal exposure we do not expect the SVB bankruptcy to have a material effect on Lipocine.

Since our last update in late last year, Lipocine announced that it would present at Biotech Showcase in San Francisco in early January and that it was distributing Series B Preferred Stock to its holders of common stock. The purpose of the preferred stock issuance is to obtain sufficient votes in the upcoming referendum on the proposed reverse stock split. In many cases, too many shareholders abstain from voting and there are not enough votes to meet minimum thresholds. The company also informed investors that it had completed enrollment of the Phase II study for decompensated cirrhosis which is evaluating LPCN 1148, which we discuss below in further detail.

LPCN 1148 Phase II Study in Decompensated Cirrhosis

Lipocine is conducting a Phase II study in decompensated cirrhosis with its LPCN 1148 asset. LPCN 1148 is a novel prodrug of androgen receptor agonist for oral administration with multi modal action to improve liver and muscle function. The compound proposes to improve quality of life for patients awaiting liver transplant, decrease hospital admissions and prevent or reduce the occurrence and recurrence of decompensation events. The 24-week trial completed enrollment of the targeted 30 patients and is expected to announce results in mid-2023. The ongoing Phase II proof of concept trial employs a prospective, multi-center, randomized, placebo-controlled two-stage design. The primary endpoint is change in skeletal muscle index at week 24. Secondary endpoints include change in liver frailty index and myosteatosis,1 rates of breakthrough hepatic encephalopathy and number of waitlist events including all-cause mortality. Total treatment duration which includes the placebo-controlled stage one and the single-active arm, open-label extension stage two is 52 weeks.


Tlando was launched by partner Halozyme in 2Q:22 with initial efforts centered on obtaining formulary access. The asset was acquired by Halozyme from the original license holder Antares Pharma in May 2022. Halozyme announced the launch of the product in a June 7th press release and plans to commercialize Tlando along with Antares’ injectable testosterone replacement therapy Xyosted. Halozyme’s orientation as a commercialization company rather than a development company led to the pass on the Tlando XR (LPCN 1111) option. Lipocine is working with a contract manufacturer for scale up and manufacturing of LPCN 1111 and has completed a technology transfer to this end. Lipocine will not develop the product any further, but is seeking a partner to do so and preparing for an efficient hand off with product ready for clinical trials. Tlando XR is available for partnering and could be ready for FDA submission after a projected 30 months of clinical trials and $10 million in investment.

Lipocine recognized minimum guaranteed revenues upfront in 4Q:21, and will not receive further royalty revenues related to Tlando for the first three years unless sales exceed the minimum contractual amounts. Next objectives for Lipocine are to seek out partners in unlicensed regions including Canada, Europe, China and Korea. Management is in active discussions with prospects for international licensing, and we expect to see a press release when a deal is signed. Management sees Tlando ex-US is one of the primary partnership efforts in its pipeline.

CNS Disorders

In late September, Lipocine announced that it had narrowed its research and development aims. It will apply the Lip’ral technology to creating new treatments for central nervous system (CNS) disorders. The company’s initial focus will be on oral formulations of endogenous neuroactive steroids that are applicable to the CNS space. Lipocine anticipates that its approach can be applied to enable effective oral delivery of endogenous modulators of the GABAA receptor, which historically have been challenging to deliver orally due to poor aqueous solubility. The CNS development portfolio includes LPCN 1154, a fast-acting oral antidepressant for postpartum depression (PPD) with potential for outpatient use; LPCN 2101, with a novel mechanism of action, for women with epilepsy; and another undisclosed CNS-focused candidate. LPCN 1148 will also be considered to be in the active pipeline for its use in hepatic encephalopathy.

The shift towards a CNS-focused portfolio converts the non-core assets into partnership opportunities. In terms of priority for business development, Tlando ex-US is first, with 1107 for pre term birth, 1144 for non-alcoholic steatohepatitis (NASH), 1148 for cirrhosis and Tlando XR following in order of priority. No further material investment is expected by Lipocine in these assets and related indications.

To support its move toward CNS disorders, Lipocine has appointed several new leaders, as shared in a November press release. George Nomikos, M.D., Ph.D. joined the company as Chief Medical Officer (CMO) and Spyros Papapetropoulos, M.D., Ph.D. was elevated to lead director and Chairman of the Board. The new additions are expected to help guide the development portfolio forward leveraging backgrounds in neurology and psychiatry and experience leading CNS-focused companies. Dr. Nomikos is a biopharmaceutical R&D scientist who has held senior roles at Scholar Rock, Biogen, Sage, Takeda, Astellas Amgen and Eli Lilly. He was also an associate professor at the Karolinska Institutet in Stockholm, Sweden. Dr. Papapetropoulos has been a member of Lipocine’s board since April 2022 and is CMO at Vigil Neuro. Former roles include senior positions at Acadia Pharmaceuticals, SwanBio Therapeutics, Cavion and a number of large pharmaceutical companies including Biogen and Pfizer.

LPCN 1154

Lipocine’s primary research and development efforts in the CNS pipeline focus on lead candidate LPCN 1154 for post-partum depression, LPCN 2101 for women with epilepsy and LPCN 1148 for management of decompensated cirrhosis and hepatic encephalopathy. LPCN 1154 is undergoing a pilot pharmacokinetic bridge study and is the most advanced of the company’s active assets. This asset is particularly attractive as existing administration of the underlying molecule, brexanolone. Brexanolone is administered as a continuous intravenous infusion over a period of 60 hours. It is mixed in a sterile solution and delivered through an intravenous catheter. The infusion is started at a low dose and gradually increased over the first 24 hours to the target dose, which is determined based on the patient's weight. During the infusion, the patient's vital signs are closely monitored, and any side effects or adverse reactions are addressed as needed. The time needed to infuse and the requirement that the patient receive the infusion in the hospital create substantial burdens and costs that could be largely alleviated if an oral form is successfully developed.

Lipocine’s PK bridge study results will inform a follow up meeting with the FDA where further discussions are planned to design a pivotal study in order to support a submission via the 505(b)(2) regulatory pathway. We think that a pivotal study could cost around $4 million and be completed in a year. Below we provide a summary of the past, present and future studies for LPCN 1154.

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1. Myosteatosis, also known as "muscle fat infiltration," is a condition where fat accumulates in the skeletal muscle tissue, leading to decreased muscle quality and function. It is commonly observed in older adults and individuals with obesity, metabolic syndrome, or diabetes.

2. Lipocine January 2023 Corporate Presentation

3. Lipocine January 2023 Corporate Presentation