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By John Vandermosten, CFA



Second Quarter 2022 Financial and Operational Results

On August 8, 2022 Lipocine (NASDAQ:LPCN) filed its second quarter 2022 Form 10-Q and posted its earnings release for the quarter ending June 30, 2022.

Highlights for the second quarter 2022 and to-date include:

➢ New board of director appointments – April 2022

➢ LPCN 1144 OLE results – May 2022

Presentation at Epilepsy Foundation Pipeline Conference – June 2022

Launch of TLANDO by partner Halozyme – June 2022

➢ Patents granted related to liver and CNS disorders – June 2022

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

➢ LPCN 2101 IND cleared – July 2022

Lipocine generated $500,000 in revenues in the second quarter. It reported net loss of ($2.6) million, or ($0.03) per diluted share.

For the quarter ending June 30, 2022 and versus the same ending June 30, 2021:

➢ Revenues were $500,000 compared to zero with amounts attributable to the fee from Antares related to the extension of the option to license LPCN 1111;

➢ Research & Development expense totaled $2.9 million, rising 98% from $1.5 million, driven by a sharp increase in contract research organization (CRO) expenses for LPCN 1148, expansion in spending for the -1154, -1111 and -1107 programs and greater personnel expense. These increases were partially offset by lower program costs for the -1144 and TLANDO programs;

➢ General & Administrative expenses were $1.1 million, falling 26% from $1.5 million primarily due to lower legal costs relating to the Clarus lawsuit, and lower personnel costs, partially offset by higher professional fees, consulting fees, proxy solicitation expenses, TLANDO royalty expense and corporate insurance costs;

➢ Total other net income was $0.9 million, compared to ($3.8) million, as contributions from interest and investment income, unrealized gains on warrants and gains on litigation settlement liability exceeded a small drag from interest expense;

➢ Net loss was ($2.6) million or ($0.03) per share compared with net loss of ($6.8) million or ($0.08) per share, respectively.

At quarter’s end, marketable securities, cash and equivalents totaled $37.4 million. Cash burn for 2Q:22 was ($3.1) million, compared with ($2.4) million in 2Q:21. During the three-month period, financing cash flows were dominated by repayment of $0.8 million of debt and end of loan payment of $0.7 million for net cash used of ($1.5) million.


Tlando was launched by partner Halozyme during the second quarter, which acquired 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. Tlando XR is now available for partnering. 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.

We expect to see continued royalty cash flows as the year progresses from Tlando sales. Lipocine recognized minimum guaranteed revenues upfront in 4Q:21, and will not recognize further royalty revenues related to Tlando unless sales exceed the minimum contractual amounts. Next objectives for Lipocine with the Tlando program 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.

LPCN 1144

One of Lipocine’s most important assets is LPCN 1144 for the treatment of non-cirrhotic non-alcoholic steatohepatitis (NASH). Program 1144 has completed a Phase II study (LiFT) and management is exploring partnership opportunities for this asset. A takeaway from the end of Phase II meeting is a requirement to conduct a dose ranging study using Lipocine’s proposed testosterone ester, testosterone dodecanoate (TD); however, Lipocine will not pay for or conduct the study. TD has several favorable characteristics compared with testosterone undecanoate including anti-infective properties and favorable pharmacokinetics.

NASH Open Label Extension Study Results for LPCN 1144

On May 12, 2022 Lipocine (NASDAQ:LPCN) announced results from its NASH Open Label Extension (OLE) study. Safety was confirmed with no observed safety signals over the 72-week duration of exposure and liver injury markers were either maintained or reduced with the use of LPCN 1144. The data was sufficiently compelling to support further development in a pivotal trial. The OLE study was an extension of the 36 week Phase II LiFT study which produced topline results in August 2021 and was summarized in our report update here. Next steps are to hold an End of Phase II meeting with the FDA to identify trial design which will further determine Lipocine’s next strategic step forward.

Of the 25 subjects enrolled in the OLE safety set, 16 participants were in the LPCN 1144 arm of the LiFT study and the remainder were assigned to the placebo arm. 23 completed the OLE with two discontinuations due to a non-drug related treatment emergent adverse event (TEAE). The purpose of the extension was to evaluate safety and tolerability of LPCN 1144 and monitor subject health over the observation period. Adverse events that were observed, including a gastrointestinal (GI) event and pedal edema, were not considered related to the study drug. Furthermore, no clinically meaningful changes in lipids were observed. This is an important conclusion as many of the investigational drugs in development for non-alcoholic steatohepatitis (NASH) were associated with poorly-tolerated adverse effects.

Six subjects chose to undergo an optional liver biopsy at the end of the OLE to provide additional safety data. Three of the enrollees were on treatment for the full 72 weeks. In this group, NASH resolution with no worsening fibrosis and fibrosis improvement with no worsening of NASH was observed as subsequently detailed.

Three patients that started out in the placebo group for the LiFT portion of 36 weeks also received a biopsy to assess their status. Multiple individuals in this group also saw either an improvement in NASH resolution with no worsening fibrosis or fibrosis improvement with no worsening of NASH during the LPCN 1144 treatment period during the last 36 weeks of observation. Details of patients in each category are below.

TEAEs for the OLE were comparable to what was observed in the LiFT study with no reported cases of cardiovascular events, thromboembolic events, hepatocellular carcinoma or drug induced liver injury. Liver injury in particular was significantly reduced during the OLE compared to baseline. Liver data is summarized in the following exhibit.

Overall, the data was supportive of further development of LPCN 1144 in male patients with NASH. This has been a space with many dashed hopes as a number of candidates from other sponsors failed to generate strong enough data to merit a submission to the FDA due to either lack of efficacy or negative side effects. With the favorable safety data in hand, and an end of Phase II meeting with the FDA along with the accompanying notes, Lipocine is actively seeking a partner to develop the asset. As discussed above, a dose ranging study will be required prior to further development.

Patents Granted

Lipocine announced the grant of two patents related to central nervous system (CNS) disorders and the use of testosterone dodecanoate for pharmaceutical use. The first US patent, 11,337,987, is titled “Compositions and Methods for Treating Central Nervous System (CNS) Disorders” and was granted to Lipocine on May 24, 2022. The application relates to compositions, dosage forms and regimens, and methods of treating a subject with a CNS disorder such as postpartum depression. The second US patent, 11,370,811, entitled “Testosterone Dodecanoate Compositions and Methods of Preparation and Use” was granted to Lipocine on June 28, 2022. The patent allows for oral or injectable administration for the application of testosterone therapy in humans for treatment of both NASH and liver disease. This patent will apply to both of the cirrhosis assets (LPCN 1144 and 1148) in future studies.

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1. Source: LPCN Oral Neurosteroids Presentation, March 2022

2. Source: LPCN Oral Neurosteroids Presentation, March 2022. Black = Improved individual subject; Red = Individual subject without improvement. Baseline was measured prior to LPCN 1144 treatment initiation. Biopsy changes in the subjects assessed utilizing NASH CRN (Clinical Research Network) scoring.

3. Source: LPCN Oral Neurosteroids Presentation, March 2022. Black = Improved individual subject; Red = Individual subject without improvement. Baseline was measured prior to LPCN 1144 treatment initiation. Biopsy changes in the subjects assessed utilizing NASH CRN (Clinical Research Network) scoring.

4. Source: LPCN Oral Neurosteroids Presentation, March 2022