UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q




(Mark
One)





x
            QUARTERLY REPORT PURSUANT TO
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For the quarterly period ended June 30,
2009




or





 ̈
            TRANSITION REPORT PURSUANT TO
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For the transition period from
____________ to ____________





Commission
file number:  001-15281





REPROS
THERAPEUTICS INC.


(Exact
Name of Registrant as Specified in its Charter)





Delaware
                (State
      or other jurisdiction of incorporation or organization)
              2408
      Timberloch Place, Suite B-7
                The
      Woodlands, Texas 77380
                (Address
      of principal executive offices and zip code)
                
                (281)
      719-3400
                (Registrant's
      telephone number, including area code)
              76-0233274
                (IRS
      Employer Identification No.)





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  ̈    No   ̈





Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer or smaller reporting company.  See definition of "accelerated
filer", "large accelerated filer" and "smaller reporting company" in Rule 12b-2
of the Exchange Act. (Check one):





Large
accelerated filer  ̈  Accelerated
filer x  Non-accelerated
filer  ̈   Smaller
reporting company    ̈





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





As of August 14, 2009, there were
outstanding 15,177,404 sharesof Common Stock, par
value $.001 per share, of the Registrant.









REPROS
THERAPEUTICS INC.


(A
development stage company)





For the
Quarter Ended June 30, 2009





INDEX





PageFACTORS
      AFFECTING FORWARD-LOOKING STATEMENTS
                    3PART
      I.  FINANCIAL INFORMATIONItem
      1.
                    Financial
      Statements (unaudited)
                    4Unaudited
      Condensed Consolidated Balance Sheets as of June 30, 2009 and December 31,
      2008
                    5Unaudited
      Condensed Consolidated Statements of Operations for the three months and
      six months ended June 30, 2009 and 2008 and from Inception (August 20,
      1987) through June 30, 2009
                    6Unaudited
      Condensed Consolidated Statements of Stockholders' Equity for the six
      months ended June 30, 2009
                    7Unaudited
      Condensed Consolidated Statements of Cash Flows for the six months ended
      June 30, 2009 and 2008 and from Inception (August 20, 1987) through June
      30, 2009
                    8Notes
      to Unaudited Condensed Consolidated Financial Statements
                    9Item
      2.
                    Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations
                    15Item
      3.
                    Quantitative
      and Qualitative Disclosures About Market Risk
                    28Item
      4.
                    Controls
      and Procedures
                    28PART
      II.  OTHER INFORMATIONItem
      1.
                    Legal
      Proceedings
                    29Item
      1A.
                    Risk
      Factors
                    29Item
      4.
                    Submission
      of Matters to a Vote of Security Holders
                    32Item
      5.
                    Other
      Information
                    33Item
      6.
                    Exhibits
                    33SIGNATURES
                    34


2


FACTORS
AFFECTING FORWARD-LOOKING STATEMENTS





This
quarterly report on Form 10-Q includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended.  The words
"may," "anticipate," "believe," "expect," "estimate," "project," "suggest,"
"intend" and similar expressions are intended to identify forward-looking
statements.  Such statements are subject to certain risks,
uncertainties and assumptions.  Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those anticipated, believed, expected,
estimated, projected, suggested or intended.  These risks and
uncertainties include risks associated with the Company's ability to continue as
a going concern and to immediately raise additional capital on acceptable terms
or at all; its ability to successfully defend itself in the recently filed class
action lawsuit; its ability to  maintain its listing on The NASDAQ
Global Market; the removal of the current clinical hold on further clinical
trials for Proellex®by the Food and Drug Administration, or FDA,and thereestablishment of safe dosing in clinical trials for Proellex®; having available
funding for the continued development of Proellex®and Androxal®;uncertainty
related to the Company's ability to obtain approval of the Company's products by
the FDA and regulatory bodies in other jurisdictions; whether a clear 
clinical path for Androxal® can be realized; uncertainty relating to the
Company's patent portfolio and license rights to such patents; and other risks
and uncertainties described in the Company's filings with the Securities and
Exchange Commission.  For additional discussion of such risks,
uncertainties and assumptions, see "Item 1. Business" and "Item 1A. Risk
Factors" and "Part I. Financial Information - Item 2. Management's Discussion
and Analysis of Financial Condition and Results of Operations - Liquidity and
Capital Resources" included elsewhere in this quarterly report on Form
10-Q.


3


PART
I.  FINANCIAL INFORMATION





Item
1.     Financial Statements




The
following unaudited condensed consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America for interim financial information and with the
instructions to Form 10-Q and Rule 10 of Regulation S-X.  Accordingly,
they do not include all of the information and footnotes required by accounting
principles generally accepted in the United States of America for complete
financial statements.  In the opinion of management, all adjustments
(which include only normal recurring adjustments) considered necessary for a
fair statement of the interim periods presented have been
included.  Subsequent events have been evaluated through August 17,
2009, which is the date on which the financial statements were issued. The
year-end balance sheet data was derived from audited financial statements, but
does not include all the disclosures required by accounting principles generally
accepted in the United States of America.  Operating results for the
three-month and six-month periods ended June 30, 2009 are not necessarily
indicative of the results that may be expected for the year ended December 31,
2009.  For further information, refer to the financial statements and
footnotes thereto included in the Company's Annual Report on Form 10-K for the
year ended December 31, 2008.


4


REPROS
THERAPEUTICS INC.


(A
development stage company)





CONDENSED
CONSOLIDATED BALANCE SHEETS
 (unaudited
and in thousands except share and per share amounts)
 
 June
      30,
                      
                      
                      December
      31,2009
                      
                      
                      2008ASSETSCurrent
      AssetsCash
      and cash equivalents
                      
                      $
                      3,977
                      
                      
                      $
                      19,470Prepaid
      expenses and other current assets
                      
                      
                      2,192
                      
                      
                      
                      1,392Total
      current assets
                      
                      
                      6,169
                      
                      
                      
                      20,862Fixed assets,net
                      
                      
                      19
                      
                      
                      
                      28Other assets,
      net
                      
                      
                      2,009
                      
                      
                      
                      1,713Total
      assets
                      
                      $
                      8,197
                      
                      
                      $
                      22,603LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      LiabilitiesAccounts
      payable
                      
                      $
                      5,458
                      
                      
                      $
                      5,132Accrued
      expenses
                      
                      
                      2,023
                      
                      
                      
                      1,857Total
      current liabilities
                      
                      
                      7,481
                      
                      
                      
                      6,989Commitments
      and contingencies (note 5)Stockholders'
      EquityUndesignated
      Preferred Stock, $.001 par value, 5,000,000shares
      authorized, none issued and outstanding
                      
                      
                      -
                      
                      
                      
                      -Common
      Stock, $.001 par value, 30,000,000 sharesauthorized,
      17,114,439 and 17,111,939 shares issued, respectivelyand
      15,177,404 and 15,174,904 shares outstanding, respectively
                      
                      
                      17
                      
                      
                      
                      17Additional
      paid-in capital
                      
                      
                      169,532
                      
                      
                      
                      168,787Cost
      of treasury stock, 1,937,035 shares
                      
                      
                      (5,948
                      )
                      
                      
                      (5,948
                      )Deficit
      accumulated during the development stage
                      
                      
                      (162,885
                      )
                      
                      
                      (147,242
                      )Total
      stockholders' equity
                      
                      
                      716
                      
                      
                      
                      15,614Total
      liabilities and stockholders' equity
                      
                      $
                      8,197
                      
                      
                      $
                      22,603




The
accompanying notes are an integral part of these consolidated financial
statements.


5


REPROS
THERAPEUTICS INC.


(A
development stage company)





CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
 (unaudited
and in thousands except per share amounts)
 
 From Inception(August 20, 1987)throughThree Months Ended June 30,
                                              
                                              
                                              Six Months Ended June 30,
                                              
                                              
                                              June 30,2009
                                              
                                              
                                              2008
                                              
                                              
                                              2009
                                              
                                              
                                              2008
                                              
                                              
                                              2009RevenuesLicensing
      fees
                                              
                                              $
                                              -
                                              
                                              
                                              $
                                              -
                                              
                                              
                                              $
                                              -
                                              
                                              
                                              $
                                              -
                                              
                                              
                                              $
                                              28,755Product
      royalties
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              627Research
      and development grants
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              1,219Interest
      income
                                              
                                              
                                              1
                                              
                                              
                                              
                                              91
                                              
                                              
                                              
                                              4
                                              
                                              
                                              
                                              359
                                              
                                              
                                              
                                              16,297Gain
      on disposal of fixed assets
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              102Other
      Income
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              35Total
      revenues and other income
                                              
                                              
                                              1
                                              
                                              
                                              
                                              91
                                              
                                              
                                              
                                              4
                                              
                                              
                                              
                                              359
                                              
                                              
                                              
                                              47,035ExpensesResearch
      and development
                                              
                                              
                                              7,784
                                              
                                              
                                              
                                              5,475
                                              
                                              
                                              
                                              13,482
                                              
                                              
                                              
                                              11,640
                                              
                                              
                                              
                                              160,750General
      and administrative
                                              
                                              
                                              1,105
                                              
                                              
                                              
                                              689
                                              
                                              
                                              
                                              2,165
                                              
                                              
                                              
                                              1,485
                                              
                                              
                                              
                                              39,439Interest
      expense and amortizationof
      intangibles
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              388Total
      expenses
                                              
                                              
                                              8,889
                                              
                                              
                                              
                                              6,164
                                              
                                              
                                              
                                              15,647
                                              
                                              
                                              
                                              13,125
                                              
                                              
                                              
                                              200,577Loss
      from continuing operations
                                              
                                              
                                              (8,888
                                              )
                                              
                                              
                                              (6,073
                                              )
                                              
                                              
                                              (15,643
                                              )
                                              
                                              
                                              (12,766
                                              )
                                              
                                              
                                              (153,542
                                              )Loss
      from discontinued operations
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              (1,828
                                              )Gain
      on disposal of discontinued operation
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              939Net
      loss before cumulative effect ofchange
      in accounting principle
                                              
                                              
                                              (8,888
                                              )
                                              
                                              
                                              (6,073
                                              )
                                              
                                              
                                              (15,643
                                              )
                                              
                                              
                                              (12,766
                                              )
                                              
                                              
                                              (154,431
                                              )Cumulative
      effect of change in accountingprinciple
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              -
                                              
                                              
                                              
                                              (8,454
                                              )Net
      loss
                                              
                                              $
                                              (8,888
                                              )
                                              
                                              $
                                              (6,073
                                              )
                                              
                                              $
                                              (15,643
                                              )
                                              
                                              $
                                              (12,766
                                              )
                                              
                                              $
                                              (162,885
                                              )Loss
      per share - basic and diluted:
                                              
                                              $
                                              (0.59
                                              )
                                              
                                              $
                                              (0.48
                                              )
                                              
                                              $
                                              (1.03
                                              )
                                              
                                              $
                                              (1.00
                                              )Weighted
      average shares used in loss per share calculation:Basic
                                              
                                              
                                              15,175
                                              
                                              
                                              
                                              12,775
                                              
                                              
                                              
                                              15,175
                                              
                                              
                                              
                                              12,775Diluted
                                              
                                              
                                              15,175
                                              
                                              
                                              
                                              12,775
                                              
                                              
                                              
                                              15,175
                                              
                                              
                                              
                                              12,775


The
accompanying notes are an integral part of these consolidated financial
statements.


6





REPROS
THERAPEUTICS INC.


(A
development stage company)




CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' EQUITY
 (unaudited
and in thousands except share amounts)
 
 DeficitAccumulatedAdditional
                          
                          
                          
                          
                          
                          
                          
                          
                          During the
                          
                          
                          TotalCommon Stock
                          
                          
                          Paid-in
                          
                          
                          Treasury Stock
                          
                          
                          Development
                          
                          
                          Stockholders'Shares
                          
                          
                          Amount
                          
                          
                          Capital
                          
                          
                          Shares
                          
                          
                          Amount
                          
                          
                          Stage
                          
                          
                          EquityBalance
      at December 31, 2008
                          
                          
                          17,111,939
                          
                          
                          $
                          17
                          
                          
                          $
                          168,787
                          
                          
                          
                          1,937,035
                          
                          
                          $
                          (5,948
                          )
                          
                          $
                          (147,242
                          )
                          
                          $
                          15,614Exercise
      of stock option to purchase common stockfor
      cash @ $3.71 per share
                          
                          
                          2,500
                          
                          
                          
                          -
                          
                          
                          
                          9
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          9Stock
      based option compensation
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          736
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          736Net
      loss
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          (15,643
                          )
                          
                          
                          (15,643
                          )Balance
      at June 30, 2009
                          
                          
                          17,114,439
                          
                          
                          $
                          17
                          
                          
                          $
                          169,532
                          
                          
                          
                          1,937,035
                          
                          
                          $
                          (5,948
                          )
                          
                          $
                          (162,885
                          )
                          
                          $
                          716
  The
accompanying notes are an integral part of these consolidated financial
statements.


7





REPROS
THERAPEUTICS INC.


(A
development stage company)




CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
 (unaudited
and in thousands)
 
 From Inception(August 20, 1987)throughSix Months Ended June 30,
                                                                                
                                                                                
                                                                                June 30,2009
                                                                                
                                                                                
                                                                                2008
                                                                                
                                                                                
                                                                                2009Cash
      Flows from Operating ActivitiesNet
      loss
                                                                                
                                                                                $
                                                                                (15,643
                                                                                )
                                                                                
                                                                                $
                                                                                (12,766
                                                                                )
                                                                                
                                                                                
                                                                                (162,885
                                                                                )Gain
      on disposal of discontinued operations
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                (939
                                                                                )Gain
      on disposal of fixed assets
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                (102
                                                                                )Adjustments
      to reconcile net loss to net cashused
      in operating activities:Noncash
      financing costs
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                316Noncash
      inventory impairment
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                4,417Noncash
      patent impairment
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                1,339Noncash
      decrease in accounts payable
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                (1,308
                                                                                )Depreciation
      and amortization
                                                                                
                                                                                
                                                                                34
                                                                                
                                                                                
                                                                                
                                                                                20
                                                                                
                                                                                
                                                                                
                                                                                3,916Noncash
      stock-based compensation
                                                                                
                                                                                
                                                                                736
                                                                                
                                                                                
                                                                                
                                                                                391
                                                                                
                                                                                
                                                                                
                                                                                6,093Common
      stock issued for agreement not tocompete
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                200Series
      B Preferred Stock issued for consultingservices
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                18Changes
      in operating assets and liabilities(net
      effects of purchase of businesses in 1988 and 1994):Increase
      in receivables
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                (199
                                                                                )Increase
      in inventory
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                (4,447
                                                                                )Increase
      in prepaid expenses and othercurrent
      assets
                                                                                
                                                                                
                                                                                (800
                                                                                )
                                                                                
                                                                                
                                                                                (297
                                                                                )
                                                                                
                                                                                
                                                                                (1,890
                                                                                )Increase
      in accounts payable andaccrued
      expenses
                                                                                
                                                                                
                                                                                492
                                                                                
                                                                                
                                                                                
                                                                                706
                                                                                
                                                                                
                                                                                
                                                                                8,676Net
      cash used in operating activities
                                                                                
                                                                                
                                                                                (15,181
                                                                                )
                                                                                
                                                                                
                                                                                (11,946
                                                                                )
                                                                                
                                                                                
                                                                                (146,795
                                                                                )Cash
      Flows from Investing ActivitiesChange
      in trading marketable securities
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                23,224
                                                                                
                                                                                
                                                                                
                                                                                (191
                                                                                )Capital
      expenditures
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                (2
                                                                                )
                                                                                
                                                                                
                                                                                (2,371
                                                                                )Purchase
      of technology rights and other assets
                                                                                
                                                                                
                                                                                (321
                                                                                )
                                                                                
                                                                                
                                                                                (252
                                                                                )
                                                                                
                                                                                
                                                                                (4,091
                                                                                )Proceeds
      from sale of PP&E
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                225Cash
      acquired in purchase of FTI
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                3Proceeds
      from sale of subsidiary, less$12,345
      for operating losses during1990
      phase-out period
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                138Proceeds
      from sale of the assets of FTI
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                2,250Increase
      in net assets held for disposal
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                (213
                                                                                )Net
      cash provided by (used in) investing activities
                                                                                
                                                                                
                                                                                (321
                                                                                )
                                                                                
                                                                                
                                                                                22,970
                                                                                
                                                                                
                                                                                
                                                                                (4,250
                                                                                )Cash
      Flows from Financing ActivitiesProceeds
      from issuance of common stock, net of
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                151,015offering
      costsExercise
      of stock options
                                                                                
                                                                                
                                                                                9
                                                                                
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                372Proceeds
      from a shareholder transaction
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                327Proceeds
      from issuance of preferred stock
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                23,688Purchase
      of treasury stock
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                (21,487
                                                                                )Proceeds
      from issuance of notes payable
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                2,839Principal
      payments on notes payable
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                (1,732
                                                                                )Net
      cash provided by financing activities
                                                                                
                                                                                
                                                                                9
                                                                                
                                                                                
                                                                                
                                                                                -
                                                                                
                                                                                
                                                                                
                                                                                155,022Net
      increase (decrease) in cash and cash equivalents
                                                                                
                                                                                
                                                                                (15,493
                                                                                )
                                                                                
                                                                                
                                                                                11,024
                                                                                
                                                                                
                                                                                
                                                                                3,977Cash
      and cash equivalents at beginning of period
                                                                                
                                                                                
                                                                                19,470
                                                                                
                                                                                
                                                                                
                                                                                1,779
                                                                                
                                                                                
                                                                                
                                                                                -Cash
      and cash equivalents at end of period
                                                                                
                                                                                $
                                                                                3,977
                                                                                
                                                                                
                                                                                $
                                                                                12,803
                                                                                
                                                                                
                                                                                $
                                                                                3,977




The
accompanying notes are an integral part of these consolidated financial
statements.


8


REPROS
THERAPEUTICS INC. AND SUBSIDIARY


(A
development stage company)





NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


June
30, 2009


(Unaudited)





NOTE
1  —  Organization, Operations, Liquidity and Subsequent
Events




Repros
Therapeutics Inc. ("the Company", "Repros," or "we," "us" or "our"), was
organized on August 20, 1987.  We are a development stage
biopharmaceutical company focused on the development of oral small molecule
drugs for major unmet medical needs that treat male and female reproductive
disorders.




Our
portfolio of products includes:





·
            Proellex®,
      a new chemical entity that acts as a selective blocker of the progesterone
      receptor, is being developed, subject to the current FDA clinical hold on
      the Proellex® clinical trials, for the treatment of symptoms associated
      with uterine fibroids and endometriosis.  We are also developing
      Proellex® as an acute treatment for anemia associated with excessive
      menstrual bleeding related to uterine
fibroids.





·
            Androxal®, a single isomer of
      clomiphene citrate, is being developed for men of reproductive age with
      low testosterone levels who want to maintain their fertility while being
      treated for low
testosterone.





On August
6, 2009, we announced that the Company received verbal notice from the United
States Food and Drug Administration (FDA) during a teleconference with the
Division of Reproductive and Urologic Products that the Company's
Investigational New Drug Applications (INDs) for Proellex® had been placed on
clinical hold for safety reasons.  This action followed the Company's
voluntary decision to suspend dosing of all patients in its clinical trials of
Proellex® after discovering elevated liver enzymes in a number of patients
enrolled in the clinical trials.





The
Company and the FDA are scheduled to discuss the safety of Proellex® and the
overall direction and scope of the Company's clinical trials of Proellex® at a
meeting in late September 2009. The FDA requested that the Company provide it
with weekly information about the patients who experienced a “Serious Adverse
Event” and still have elevated liver enzymes.  The Company is in the
process of gathering the information from its vendors and will provide the
information to the FDA to the extent available.  The Company intends
to provide the FDA with a detailed analysis of all of the women with elevated
liver enzymes at the September 2009 meeting and to discuss with the FDA the
events that led to the suspension of the clinical trials, and determine whether
and under which conditions, if any, the clinical hold may be lifted and the
clinical trials of Proellex® be safely resumed.


If the
FDA were to lift the clinical hold on Proellex® following the upcoming meeting
in September 2009, and if the FDA requires a lower dosage of Proellex® to be
used for future clinical trials, the Company would be required to commence Phase
2 studies again with the required lower dosage, thereby resulting in extensive
additional costs and delays.


As of
June 30, 2009, Repros had accumulated losses of $162.9 million and a working
capital deficit with accounts payable and accrued expenses of approximately $7.5
million exceeding the Company's cash and cash equivalents of approximately $4.0
million. As of
August 14, 2009, the amount of cash and cash equivalents was $2.7 million, and
the amount of accounts payable and accrued expenses was significantly higher
than $7.5 million.  Several of the Company’s
contract research organizations have notified the Company that they have claims,
which includes amounts due upon termination of the clinical trials, and in one
case a vendor has sued the Company for $147,000 for amounts it claims it is owed
under their agreement with the Company. We have a dispute with another
clinical research organization regarding the suitability of work provided to the
Company.  No
disputed billings were received as of June 30, 2009 and no disputed amounts are
reflected in these financial statements.The Company has
experienced negative cash flows from operations since inception and has funded
its activities to date primarily from equity financings and corporate
collaborations.


9




Since our
currently available cash and cash equivalents is not adequate to meet our
accounts payable and accrued expenses, we have engaged a law firm that
specializes in work-out and bankruptcy matters to assist us in attempting to
negotiate with and reduce amounts owed to our vendors. The Company intends, to
the extent possible, to ensure that our available cash is used for patient
safety in connection with our study closeout activities. However, due to our
constrained cash position, the Company does not have sufficient funds at this
time to comply with all of our financial obligations under the agreements with
the clinical research organizations unless acceptable workout arrangements are
completed.




Based on
our existing and projected accounts payable and commitments, we believe we do
not have sufficient cash to continue normal operations and need to raise
additional capital immediately in order to continue operations on a normal
basis. In the event that we are unable to obtain adequate financing to meet our
immediate short term liquidity needs, we will pursue other options, including
but not limited to, additional reductions of expenses, sale of the Company, sale
or license of a portion or all of our assets, a bankruptcy filing or the
liquidation of the Company.




Our
capital requirements depend on numerous factors, including our ability to resume
our clinical trials should the current clinical trial hold on Proellex®by the FDA be
removed, and whether we determine to pursue all of the previous clinical
development plans for Proellex® andAndroxal®.  Our
announcements regarding the liver toxicity in our Proellex®clinical trials
and the clinical hold imposed by the FDA along with the receipt of the Nasdaq
letter regarding our failure to meet the current Nasdaq listing requirements
have significantly depressed our stock price and severely impaired our ability
to raise additional capital funds to where it could be difficult or impossible
for us to raise any additional capital.




No
assurance can be given that we will be successful in obtaining financing on
acceptable terms or at all. We anticipate that if we are able to secure
financing, such financing will result in significant dilution of the ownership
interests of the Company's current stockholders and may provide certain rights
to the new investors senior to the rights of its current stockholders, including
but not limited to voting rights and rights to proceeds in the event of a sale
or liquidation of the Company. In the event that we are unable to obtain
adequate financing to meet our immediate short term liquidity needs, we will
pursue other options, including but not limited to, reductions of personnel and
other expenses, sale of the Company, sale or license of a portion or all of
our  assets, a bankruptcy filing or the liquidation of the
Company.




The
uncertainties relating to the foregoing matters raise substantial doubt about
Repros’
ability to continue as a going concern. Our financial statements do not include
any adjustments that might result from the outcome of these
uncertainties.




Deficiency
Letter from The Nasdaq Global Market




On August
7, 2009, the Company received a letter from The Nasdaq Stock Market advising
that the Company’s market value was below the minimum $50,000,000 requirement
for continued listing on the Nasdaq Global Market.  The Company is
provided 90 days until November 5, 2009, to regain compliance, at which time the
Company’s securities will be delisted from such market unless the market value
of the Company’s securities listed on Nasdaq is $50,000,000 or more for a
minimum of 10 consecutive business days.  The letter also recited that
the Company’s total assets and total revenue fell below certain required
thresholds under related rules and suggested that the Company consider applying
for transfer of its securities to the Nasdaq Capital Market, which has
substantially lower listing requirements.  The Company is considering
its options at this time and intends to take whatever actions it can to best
protect shareholder value, however, there can be no assurance that the Company’s
securities will continue to be traded on any of The Nasdaq Stock Market trading
markets.




Shareholder
Class Action Lawsuit




On August
7, 2009,  R.M. Berry filed a putative class action lawsuit naming the
Company, Joseph Podolski, Paul Lammers, and Louis Ploth, Jr. as
defendants.  The lawsuit is pending in the United States District Court for
the Southern District of Texas, Houston Division.  The lawsuit, styled R.M.
Berry, on Behalf of Himself and all Others Similarly Situated v. Repros
Therapeutics, Inc., Joseph Podolski, Paul Lammers, and Louis Ploth, Jr., alleges
that the defendants made certain misleading statements related to the Company’s
Proellex drug.  Among other claims, the lawsuit contends that the
defendants misrepresented the side effects of the drug related to liver
function, and the risk that these side effects could cause a suspension of
clinical trials of Proellex. The lawsuit seeks to establish a class of
shareholders allegedly harmed by the misleading statements, and asserts causes
of action under the Securities Exchange Act of 1934.  To date, no
proceedings of any kind have occurred in the lawsuit, and an estimate of the
possible loss or range of loss in connection with the lawsuit cannot be
made.  On August 14, 2009, a lawsuit making similar allegations and naming
the same defendants was also filed in the United States District Court for the
Southern District of Texas.  This suit is styled Josephine Medina, Individually and
On Behalf of all Others Similarly Situated v. Repros Therapeutics, Inc., Joseph
Podolski, Paul Lammers, and Louis Ploth, Jr.  To date, no
proceedings of any kind have occurred in the lawsuit, and an estimate of the
possible loss or range of loss in connection with the lawsuit cannot be made.
 The Company has retained counsel to assist it in defending both these
action.


10




Possible
Bankruptcy Filing




If we are
unable to raise or generate sufficient capital to fully address the
uncertainties of our financial position, we may be unable to realize value from
our assets and discharge our liabilities in the normal course of business. If we
are unable to settle our obligations to our creditors or if we are unable to
obtain financing to support continued satisfaction of our obligations, we may
need to seek protection under the provisions of the U.S. Bankruptcy
Code.  In that event, we may seek to reorganize our business, or we or
a trustee appointed by the court may be required to liquidate our assets. If we
needed to liquidate our assets, we would likely realize significantly less from
them than the values at which they are carried on our financial statements. The
funds resulting from the liquidation of our assets would be used first to pay
the debt owed to any secured and unsecured creditors before any funds would be
available to our stockholders, and any shortfall in the proceeds would directly
reduce the amounts available for distribution, if any, to our creditors and to
our stockholders.




Effect
on National
Institutes of Health (“NIH”)License for Proellex





The
Company’s Exclusive License Agreement, as amended on July 7, 2009, with the NIH
dated April 16, 1999 relating to Proellex® requires that the Company raise no
less than $6,000,000 on or before September 30, 2009, and additionally provides
that the license may be terminated by the NIH immediately upon notice to the
Company following a filing of a petition in bankruptcy or a letter from the
Company to the NIH stating that it is insolvent. Through
August 17, 2009, we have not raised any funds towards the $6,000,000
requirement.The Company intends to discuss with the NIH its current
financial status and obtain appropriate assurances that the license will not be
terminated in order to facilitate a financing, but there can be no assurance
that the Company will be successful in its efforts. In the event that any of the
conditions contained in the license agreement for termination by the NIH
are triggered, the Company's license agreement may be terminated and the Company
would lose its exclusive rights to Proellex®.  Any such termination of the
license agreement could have a material adverse effect on the Company's
financial position and results of operations, and in such event, the value of
the Company's common stock may be materially adversely affected.




Recent
Accounting Pronouncements




In
September 2006, FASB issued SFAS No. 157, "Fair Value Measurements" which
defines fair value, established a framework for measuring fair value in
generally accepted accounting principles and expanded disclosures about fair
value measurements.  SFAS No. 157 is effective for financial
statements issued for fiscal years beginning after November 15, 2007 and interim
periods within those fiscal years.  FSP 157-2 "Partial Deferral of the
Effective Date of Statement 157" (FSP 157-2), deferred the effective date of
SFAS No. 157 for all nonfinancial assets and nonfinancial liabilities to fiscal
years beginning after November 15, 2008.  The implementation of SFAS
No. 157 for financial assets and financial liabilities, effective January 1,
2008, did not have a material impact on Repros' consolidated financial position
and results of operations.  The implementation of SFAS No. 157 for
nonfinancial assets, effective January 1, 2009, and nonfinancial liabilities did
not have a material impact on the Company's consolidated financial position and
results of operations.


11




In May
2009, the FASB issued SFAS No. 165, "Subsequent Events" (SFAS No.
165).  SFAS No. 165 provides guidance on management's assessment of
subsequent events and incorporates this guidance into accounting
literature.  SFAS No. 165 is effective prospectively for interim and
annual period ending after June 15, 2009.  The implementation of this
standard did not have a material impact on our consolidated financial position
and results of operations.  Subsequent events have been evaluated
through August 17, 2009, which is the date on which the financial statements
were issued.




NOTE  2  —  Patents
and Patent Applications




As of
June 30, 2009, the Company had approximately $2,009,000 in capitalized patent
and patent application costs reflected on its balance sheet.  Of this
amount, $957,000 relates to patent and patent application costs for
Proellex® and $1,052,000 relates to patent and patent application costs for
Androxal®.




Of the
$957,000 patent and patent application costs related to Proellex®, approximately
$407,000 relate to our Exclusive License Agreement with the NIH.  The
Company intends to discuss with the NIH its current financial status and obtain
appropriate assurances that the license will not be terminated in order to
facilitate a financing, but there can be no assurance that the Company will be
successful in its efforts. In the event that any of the conditions contained in
the license agreement for termination by the NIH are triggered, the Company's
license agreement may be terminated and the Company would incur an impairment
loss related to these capitalized patent and patent application
costs.




Additionally,
due to the Company’s financial situation, the Company concluded that it will no
longer seek to protect the specific matter covered in two Proellex® and one
Androxal® patent applications and will incur a loss of approximately $224,000 in
the third quarter of 2009 to abandon these assets. The remaining capitalized
patent and patent application costs were not impacted by the current FDA
clinical hold on the Proellex clinical trials as the patents can continue to be
used, outlicensed or sold to third parties.




Should
the Company not continue development of Proellex and/or Androxal or should the
Company not continue as a going concern, the remaining capitalized patent and
patent application costs may not be recoverable, which would result in charges
to operating results in future periods.




NOTE  3  —  Accrued
Expenses




Accrued
expenses consist of the following (in thousands):




June 30, 2009
                  
                  
                  December 31, 2008Research
      and development costs
                  
                  $
                  1,914
                  
                  
                  $
                  1,573Payroll
                  
                  
                  —
                  
                  
                  
                  123Patent
      costs
                  
                  
                  3
                  
                  
                  
                  81Other
                  
                  
                  106
                  
                  
                  
                  80Total
                  
                  $
                  2,023
                  
                  
                  $
                  1,857





NOTE
4  —  Loss Per Share




Basic
loss per share is computed by dividing net loss by the weighted average number
of shares of common stock outstanding during the period.  Diluted loss
per share is computed using the average share price for the period and applying
the treasury stock method to potentially dilutive outstanding
options.  In all applicable periods, all potential common stock
equivalents were antidilutive and, accordingly, were not included in the
computation of diluted loss per share.




The
following table presents information necessary to calculate loss per share for
the three-month and six-month periods ended June 30, 2009 and 2008 (in
thousands, except per share amounts):


12





Three Months Ended June 30,
                
                
                Six Months Ended June 30,2009
                
                
                2008
                
                
                2009
                
                
                2008Net
      Loss
                
                $
                (8,888
                )
                
                $
                (6,073
                )
                
                $
                (15,643
                )
                
                $
                (12,766
                )Average
      common shares outstanding
                
                
                15,175
                
                
                
                12,775
                
                
                
                15,175
                
                
                
                12,775Basic
      and diluted loss per share
                
                $
                (0.59
                )
                
                $
                (0.48
                )
                
                $
                (1.03
                )
                
                $
                (1.00
                )




Other
potential common stock (consisting of stock options and warrants associated with
the October 2, 2008 offering) of 3,598,117 and 1,663,565 for the periods ended
June 30, 2009 and 2008, respectively, were excluded from the above calculation
of diluted loss per share because they were not dilutive.




NOTE
5  —   Commitments and Contingencies




In
December 2008, Repros committed to the purchase of at least $3 million of the
bulk active ingredient of Proellex® which is to be produced under a new
scaled-up amended manufacturing process by Gedeon Richter.  Under this
Purchase Request, as amended, the Company paid $750,000 in the first quarter of
2009 and $750,000 in the second quarter of 2009.  As of June 30, 2009,
$1.5 million is reflected under Prepaid Expenses and Other Current Assets on the
balance sheet.  Repros is obligated to make two additional payments of
$750,000 each for the final two batches of Proellex® to be delivered in the
third and fourth quarters of 2009.  The remaining two payments are due
based upon the delivery of finished product by Gedeon Richterand our
acceptance of the finished product, with the first such payment due no sooner
than mid August 2009 and the final payment due no sooner than mid January
2010.  As of August 17, 2009 the Company has not received any shipment
or accepted any product from Gedeon Richter of material produced from the scaled
up process. On June 26, 2009, Gedeon Richter notified Repros that the material
produced did not possess the required particle properties under the revised
Purchase Request. The Company is in the process of considering whether such
non-conforming material may still suit its purposes.  Should we
determine that such non-conforming material is acceptable and actually take
shipment of it, we may be required to pay Gedeon Richter an additional $750,000
owed upon delivery of the first two batches.  The Company intends to
discuss with Gedeon Richter an amendment to the Purchase Request in an effort to
reduce its future commitments and resolve the outcome of the non-conforming
batches of material.  At such time as we accept such material, we will
recognize the prior $1.5 million reflected as Prepaid Expenses and Other Current
Expenses as an expense associated with this purchase together with any
additional amounts payable.  If the Company is unable to make
the remaining payments as required under the terms of this Purchase
Request, we may not receive any of the finished product from Gedeon Richter and
may not be refunded any of the previously paid $1.5 million reflected under
Prepaid Expenses and Other Current Assets on our balance sheet, which may
require us to expense the $1.5 million prepaid asset.  This Purchase
Request provides that all payments made to Gedeon Richter under the Purchase
Request will be returned if they can not meet their obligations under this
Purchase Request by March 31, 2010. It is anticipated that they will perform
under the contract and, therefore, we will not receive
reimbursement.




Repros
has entered into agreements with certain clinical research organizations to
conduct its clinical trials for Proellex®. All of these organizations have been
notified by us that the clinical trials for Proellex® have been put on hold, and
that further efforts by such organizations should be focused on conducting
patient safety evaluations as part of study closeout. Several organizations have
ceased performing any work for us and recently notified the Company of potential
claims against us which includes amounts due upon termination of work, and, in
one case filed suit against the Company seeking payment of $147,000 under such
vendor’s agreement with the Company. We have a dispute with another
clinical research organization regarding the suitability of work provided to the
Company. No disputed billings were received as of June 30, 2009 and no disputed
amounts are reflected in these financial statements. We are investigating such
invoices and claims. The Company intends, however, to the extent possible, to
ensure that its available cash is used for patient safety in connection with
study closeouts. Due to our constrained cash position, we do not have sufficient
funds at the present time to comply with the financial obligations under the
agreements with clinical research organizations, unless acceptable work-out
arrangements are completed.




13




Repros'
Androxal® product candidate and its uses are covered in the United States by two
issued U.S. patents and seven pending patent applications.  Foreign
coverage of Repros' Androxal® product candidate includes 33 issued foreign
patents and 69 foreign pending patent applications.  The issued
patents and pending applications relate to methods and compositions for treating
certain conditions including the treatment of testosterone deficiency in men,
the treatment of metabolic syndrome and conditions associated therewith, and the
treatment of infertility in hypogonadal men.  Androxal® (the
trans-isomer of clomiphene) is purified from clomiphene citrate.  A
third party individual holds two issued patents related to the use of an
anti-estrogen such as clomiphene citrate and others for use in the treatment of
androgen deficiency and disorders related thereto.  In our prior
filings with the SEC, we have described our request to the U.S. Patent and
Trademark Office, or PTO, for re-examination of one of these patents based on
prior art.  The third party amended the claims in the re-examination
proceedings, which led the PTO to determine that the amended claims are
patentable in view of those publications under consideration and a
re-examination certificate was issued.  However, Repros believes that
the amended claims are invalid based on additional prior art publications, and
its request for re-examination by the PTO in light of a number of these
additional publications and other publications cited by the PTO, has been
granted.  All of the claims challenged by Repros have been finally
rejected in the re-examination and the patent holder has appealed the rejections
to the PTO Board of Patent Appeals and Interferences.  An oral hearing
was held on July 15, 2009, and no decision has been rendered following the oral
hearing as of the date of this quarterly report.  Repros also believes
that the second of these two patents is invalid in view of published prior art
not considered by the PTO.  Nevertheless, there is no assurance that
either patent will ultimately be found invalid over the prior art.  If
such patents are not invalidated by the PTO, Repros may be required to obtain a
license from the holder of such patents in order to develop Androxal® further or
attempts may be made to undertake further legal action to invalidate such
patents.  If such licenses were not available on acceptable terms, or
at all, Repros may not be able to successfully commercialize or out-license
Androxal®.




On August
7, 2009,  R.M. Berry filed a putative class action lawsuit naming the
Company, Joseph Podolski, Paul Lammers, and Louis Ploth, Jr. as
defendants.  The lawsuit is pending in the United States District Court for
the Southern District of Texas, Houston Division.  The lawsuit, styled R.M.
Berry, on Behalf of Himself and all Others Similarly Situated v. Repros
Therapeutics, Inc., Joseph Podolski, Paul Lammers, and Louis Ploth, Jr., alleges
that the defendants made certain misleading statements related to the Company’s
Proellex drug.  Among other claims, the lawsuit contends that the
defendants misrepresented the side effects of the drug related to liver
function, and the risk that these side effects could cause a suspension of
clinical trials of Proellex. The lawsuit seeks to establish a class of
shareholders allegedly harmed by the misleading statements, and asserts causes
of action under the Securities Exchange Act of 1934.  To date, no
proceedings of any kind have occurred in the lawsuit, and an estimate of the
possible loss or range of loss in connection with the lawsuit cannot be
made.  On August 14, 2009, a lawsuit making similar allegations and naming
the same defendants was also filed in the United States District Court for the
Southern District of Texas.  This suit is styled Josephine Medina, Individually and
On Behalf of all Others Similarly Situated v. Repros Therapeutics, Inc., Joseph
Podolski, Paul Lammers, and Louis Ploth, Jr.  To date, no
proceedings of any kind have occurred in the lawsuit, and an estimate of the
possible loss or range of loss in connection with the lawsuit cannot be made.
 The Company has retained counsel to assist it in defending both these
action.


14




Item
2.  Management's Discussion and Analysis of Financial Condition and
Results of Operations




The
following discussion contains forward-looking statements, within the meaning of
Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and
Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") that involve risk and uncertainties.  Any statements contained
in this quarterly report that are not statements of historical fact may be
forward-looking statements. When we use the words "may," "anticipates,"
"believes," "plans," "expects" and similar expressions, we are identifying
forward-looking statements. Forward-looking statements involve risks and
uncertainties which may cause our actual results, performance or achievements to
be materially different from those expressed or implied by forward-looking
statements. The following discussion of financial condition should be read in
conjunction with the accompanying consolidated financial statements and related
notes.




Repros
Therapeutics Inc.




We are a
development stage biopharmaceutical company focused on the development of oral
small molecule drugs for major unmet medical needs associated with male and
female reproductive disorders.  The clinical trials relating to
Proellex® have been placed on clinical hold by the FDA due to safety related
concerns resulting from elevated liver enzymes in a number of patients enrolled
in the clinical trials.  Completion of our ongoing clinical trial
activities relating to our other product candidate, Androxal®, issubject to,
among other things, adequate cash being available.




As of
June 30, 2009, we had approximately $4.0 million in cash and cash equivalents
and our accounts payable and accrued expenses were approximately $7.5 million.
Furthermore, as of August 14, 2009, we had approximately $2.7 million in cash
and cash equivalents.  Our
accounts payable and accrued expenses as of August 14, 2009 is significantly
higher than it was at the end of the second quarter. In addition, we are
reviewing our obligations under our agreements with our contract research
organizations to determine the extent of our obligations thereunder.As a result, the  amount of cash on hand is not sufficient to
continue to fund our ongoing clinical trials of Androxal®, complete all
necessary activities relating to the suspension of our clinical trial program
for Proellex®, pay our accounts payable and accrued expenses as well as our
normal corporate overhead and expenses.  Effective August 16, 2009, we
adopted a 50% salary reduction program for all salaried employees in an effort
to reduce expenses while maintaining our current effort without
diminution.  We are in the process of exploring potential new
financing alternatives that may allow us to maintain our current reduced
level of operations; however, there can be no assurance that we will be
successful in raising any such funds on a timely basis or at
all.  Significant additional capital will be required for us to
continue development of either of our product candidates.  Failure to
raise sufficient funds in the immediate short term as described above will
likely result in the filing of bankruptcy and dissolution of the
Company.




Our
current product candidates consist of the following:




Androxal®
(male reproductive health):




We believe our product candidate for
male reproductive health, Androxal®, is a new chemical entity. Androxal® is a
single isomer of clomiphene citrate and is an orally active proprietary small
molecule compound.




We are developing Androxal® for men of reproductive age
with low testosterone levels who want to maintain their fertility while being
treated for their low testosterone condition. During the second quarter of 2008,
we initiated a Phase 2b proof-of-concept clinical trial  in which we
are monitoring the effects of Androxal® on male fertility and
testicular function in patients being treated for low testosterone as compared
to Testim®, a popular marketed topical testosterone medication. We anticipate
holding a meeting with the FDA during the second half of 2009, provided that
sufficient funds can be raised to continue development of this product. 
Given
that there is an acceptable treatment regimen for men with low testosterone,
there is significant uncertainty as to whether or not an additional approach
such as Androxal® would be approved by the FDA or accepted in the market.At this time it is too early in the clinical development process to
estimate when or even if an NDA for Androxal® will be submitted for this
indication.


15




In April 2008, we submitted a White
Paper, based on the results from a previously conducted non-pivotal Phase 2
clinical trial with Androxal® for the treatment of testosterone deficiency due
to secondary hypogonadism, to the FDA's Division of Reproductive and Urology
Products. The data demonstrated that in subjects with serum glucose levels of
greater than 105 mg/dL, there was a statistically significant reduction in
fasting serum glucose and a higher response rate in the treatment group with
Androxal®as
compared with groups receiving either placebo or Androgel®,, the
current standard of care for the treatment of testosterone deficiency. In
November 2008, after the FDA reviewed this paper we received guidance suggesting
that we open a new IND with the Division of Metabolic and Endocrine Products, or
DMEP, for the investigation of Androxal® as a potential treatment for
type 2 diabetes. Provided that sufficient cash is available, we plan to submit a
new IND for this indication to the DMEP in the second half of 2009. Should we
raise adequate funds to continue our operations, we anticipate conducting a
Phase 2b proof-of-concept clinical trial with Androxal® for glucose regulation after
receiving additional feedback from the FDA. At this time it is too early in the
clinical development process to estimate when or even if a NDA for Androxal® will be submitted for this
indication. The plan to develop Androxal® in this new indication
replaces our previously announced plan to develop Androxal® in men with adult-onset
idiopathic hypogonadotrophic hypogonadism, or AIHH, with concomitant plasma
glucose and lipid elevations, all of which are components of Metabolic
Syndrome.




We were previously developing
Androxal® in the United
States to treat testosterone deficiency due to secondary hypogonadism by
restoring normal testosterone production in males with functional testes and
diminished pituitary function, a common condition in the aging male. After a
Type "C" meeting held with the FDA on October 15, 2007, we believed that there
was no clear clinical path to develop Androxal® for this indication in the
U.S. Androxal® might be
developed outside of the U.S., for this indication if our future financial
resources are sufficient.




Proellex®
(female reproductive health):




Proellex®, our product candidate
for female reproductive health, is a new chemical entity that acts as a
selective blocker of the progesterone receptor and is being developed for the
treatment of symptoms associated with uterine fibroids and
endometriosis.  We are also developing Proellex® as an acute treatment for
anemia due to excessive bleeding associated with uterine fibroids. However, as a
result of the recent liver toxicity exhibited by Proellex®, all ongoing clinical
trial activities have been put on hold by the FDA.  There is currently
no FDA-approved orally administered drug treatment for the long-term treatment
of uterine fibroids or endometriosis.




Our
estimates regarding the timing of our Proellex® clinical development program are
completely on hold at this time in light of the FDA clinical hold and our recent
discontinuation of ongoing clinical trials. In addition, any future development
efforts are totally dependent on our ability to raise sufficient capital or find
an appropriate partner to proceed and on decisions by the FDA regarding the
current clinical hold on Proellex® clinical trials. If the FDA were to lift the
clinical hold on Proellex® following the upcoming meeting in September 2009, and
if the FDA requires a lower dosage of Proellex® to be used for future clinical
trials, the Company would be required to commence Phase 2 studies again with the
required lower dosage, thereby resulting in extensive additional costs and
delays. The length of time required to complete Phase 1, Phase 2 and Phase 3
clinical trials and long-term Open Label Safety Trials may vary
substantially according to factors relating to the particular trial, such as the
type arid intended use of the drug candidate, the clinical, trial design and the
ability to enroll suitable patients. We have also, in the past, had difficulty
recruiting patients into our Proellex® clinical trials primarily due to the
various test procedures that are required, including multiple endometrial
biopsies. Recruiting patients would likely be even more difficult due to the
recent liver toxicity exhibited by Proellex®.




16




Business Strategy




Our immediate short-term business
objective is to concentrate our remaining resources on ensuring the safety of
those patients recently discontinued from the suspended Proellex® studies.
Pending our ability to obtain sufficient funds to continue our business we plan
to focus our clinical program on Androxal® to determine if a clear clinical path
can be realized via discussion with the FDA pending completion of "proof of
concept" Phase II studies.




Should the FDA permit the resumption of
the Proellex®
clinical trials, we will assess whether there are sufficient funds available to
continue development ourselves of such product candidate or whether such program
would be more appropriately funded by a corporate partner.  Therefore,
we will continue to explore corporate partnering opportunities for assistance in
the clinical development funding and commercialization of our products, as
appropriate; however, there can be no assurance that a corporate partnering
opportunity will be found.




Risks
Affecting Us




Our business is subject to numerous
risks as discussed more fully in “Item 1A. Risk Factors” in our annual report on
Form 10-K for the year ended December 31, 2008 and the section entitled "Risk
Factors" in this quarterly report.  We are exploring various financing
alternatives to address our immediate short term liquidity needs. No assurance
can be given that we will be successful in obtaining financing on acceptable
terms or at all. We anticipate that if we are able to secure financing, that
such financing will result in significant dilution of the ownership interests of
our current stockholders and may provide certain rights to the new investors
senior to the rights of our current stockholders, including but not limited to
voting rights and rights to proceeds in the event of a sale or liquidation of
the Company. In the event that we are unable to obtain adequate financing to
meet our immediate short term liquidity needs, we will pursue other options,
including but not limited to, reductions of expenses, sale of the Company, sale
or license of a portion or all of our assets, a bankruptcy filing or the
liquidation of the Company.




In addition, we have recently suspended
dosing in the clinical trials of Proellex®, have not
received regulatory approval for any of our product candidates, have not
successfully earned any significant commercial revenues from any of our product
candidates and may never launch either of our product candidates. If we cannot
resume dosing in the clinical trials of Proellex® or do not successfully
commercialize any of our product candidates, we will be unable to achieve our
business objectives. In addition, the reported results of our clinical trials
completed to date may not be indicative of results that will be achieved in
later-stage clinical trials involving larger and more diverse patient
populations. As of June 30, 2009, we had an accumulated deficit of approximately
$162.9 million, accounts payable and accrued expenses of approximately $7.5
million and cash and cash equivalents of $4 million. Our
accounts payable and accrued expenses as of August 14, 2009 is significantly
higher than it was at the end of the second quarter. In addition, we are
reviewing our obligations under our agreements with our contract research
organizations to determine the extent of our obligations thereunder.There is a substantial doubt about our ability to continue as a going
concern and we expect to continue to incur significant losses over the next
several years, and we may never become profitable.  Our financial
statements do not include any adjustments that might result from the outcome of
these uncertainties.




Corporate
Information




We were organized as a Delaware
corporation in August 1987. Our principal executive offices are located at 2408
Timberloch Place, Suite B-7, The Woodlands, Texas, 77380, and our telephone
number is (281) 719-3400. We maintain an internet website at www.reprosrx.com.  The
information on our website or any other website is not incorporated by reference
into this quarterly report and does not constitute a part of this quarterly
report. Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K and all amendments to such reports are made
available free of charge through the Investor Relations section of our website
as soon as reasonably practicable after they have been filed or furnished with
the SEC.


17




General




The
clinical development of pharmaceutical products is a complex undertaking, and
many products that begin the clinical development process do not obtain
regulatory approval.  The costs associated with our clinical trials
may be impacted by a number of internal and external factors, including the
recent clinical hold put on our clinical trials relating to Proellex® by the
FDA, the number and complexity of clinical trials necessary to obtain regulatory
approval, the number of eligible patients necessary to complete our clinical
trials and any difficulty in enrolling these patients, and the length of time to
complete our clinical trials.  Given the uncertainty of these
potential costs, we recognize that the total costs we will incur for the
clinical development of our product candidates may exceed our current
estimates.  Any failure by us to reestablish safe dosing in the
clinical trials of Proellex®, to obtain, or any delay in
obtaining, regulatory approvals could cause our research and development
expenditures to increase and, in turn, have a material adverse effect on our
results of operations.




As with
most biotechnology companies with drug candidates in development, the path to
marketing approval by the FDA, and comparable foreign agencies for each such
candidate, is long and uncertain. The regulatory process, both domestically and
abroad, is a multi-year process with no certainty when and if a drug candidate
will be approved for commercial use. The development path for a particular drug
candidate typically includes a variety of clinical trials. While we have a
general estimate of the timeframe for our clinical trials, the actual
anticipated completion dates for each of our drug candidates are uncertain. The
length of time for a clinical trial may vary substantially according to factors
relating to the particular clinical trial, such as the type and intended use of
the drug candidate, the clinical trial design and the ability to enroll suitable
patients.  A product may be put on clinical hold by the FDA in order
for them to assess the safety of the product, similar to that which has happened
with respect to Proellex®,with the result
that previous estimates for clinical trial completion and related NDA filings
get missed.  In addition, it may be necessary to undertake additional
unanticipated clinical trials during the development path, particularly with
respect to the recent findings relating to the increase in liver enzymes
observed in our Proellex®clinical
trials.  Alternatively, many products that are placed on clinical hold
by the FDA may never be released from such hold.




We will
not receive any revenue from commercial sales unless we, or a potential partner,
complete the clinical development process, obtain regulatory approval, and
successfully commercialize one or more of our product
candidates.  Similarly, we do not have a reasonable basis to predict
when or if material net cash inflows from the commercialization and sale of our
drug candidates will occur.  To date, we have not commercialized any
of our drug candidates to any material extent and in fact may never do
so.




Our
results of operations may vary significantly from quarter to quarter and year to
year, and depend on, among other factors, our ability to be successful in our
clinical trials, the regulatory approval process in the United States and other
foreign jurisdictions and the ability to complete new licenses and product
development agreements.  The timing of our revenues may not match the
timing of our associated product development expenses.  To date,
research and development expenses have generally exceeded revenue in any
particular period and/or fiscal year.




For a
discussion of the risks and uncertainties associated with the timing and costs
of completing the development and commercialization of the Company's drug
candidates, see the section titled "Item 1A.  Risk Factors" in this
quarterly report.


18


As of
June 30, 2009, the Company had an accumulated deficit of $162.9 million,
accounts payable and accrued expenses of approximately $7.5 million and cash and
cash equivalents of approximately $4.0 million.  Furthermore, as of
August 14, 2009, we had approximately $2.7 million in cash and cash equivalents,
and the amount of accounts payable and accrued expenses were significantly
higher than $7.5 million. We have experienced negative cash flows from
operations since inception and have funded our activities to date primarily from
equity financings and corporate collaborations.  Based on our current
commitments associated with suspending our clinical trials for Proellex® and
other existing and projected obligations and expenditures, we believe we do not
have sufficient cash to continue normal operations and we will need to raise
additional capital immediately in order to continue operations on a normal
basis.  In the event that we are unable to obtain adequate financing
to meet our immediate short term liquidity needs, we will pursue other options,
including but not limited to, additional reductions of expenses, sale of the
Company, sale or license of a portion or all of our assets, a bankruptcy filing
or the liquidation of the Company.  The uncertainties relating to the
foregoing matters raise substantial doubt about our ability to continue as a
going concern.  Our financial statements do not include any
adjustments that might result from the outcome of these
uncertainties.




We have
11 full-time employees that utilize the services of contract research
organizations, contract manufacturers and various consultants to assist us in
performing clinical and regulatory services for the clinical development of our
products.  Effective August 16, 2009, we adopted a 50% salary
reduction program for all salaried employees in an effort to reduce expenses
while maintaining our current effort without diminution. Such reduction could
have a negative impact on our ability to retain our employees.  We are
substantially dependent on our various contract groups to adequately perform the
activities required to obtain regulatory approval of our products.




We have
accumulated net operating losses through June 30, 2009 and the value of the tax
asset associated with these accumulated net operating losses can be
substantially diminished in value due to various tax regulations, including
change in control provisions in the tax code.  Losses have resulted
principally from costs incurred in conducting clinical trials for our product
candidates, in research and development activities related to efforts to develop
our products and from the associated administrative costs required to support
those efforts.  There can be no assurance that we will be able to
successfully complete the transition from a development stage company to the
successful introduction of commercially viable products.  Our ability
to achieve profitability will depend, among other things, on successfully
completing the clinical development of our products in a reasonable time frame
and at a reasonable cost, obtaining regulatory approvals, establishing
marketing, sales and manufacturing capabilities or collaborative arrangements
with others that possess such capabilities, our and our partners' ability to
realize value from our research and development programs through the
commercialization of those products and raise sufficient funds to finance our
activities.  There can be no assurance that we will be able to achieve
profitability or that profitability, if achieved, can be sustained.




Critical
Accounting Policies and the Use of Estimates




The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the condensed consolidated financial statements and the reported amounts of
revenues and expenses during the reporting period.  Actual results
could differ from those estimates.




Capitalized
Patent and Patent Application Costs




We
capitalize the cost associated with building our patent library for Proellex®
and Androxal®.  As of June 30, 2009, other assets consist of
capitalized patent and patent application costs in the amount of
$2,009,000.  Patent costs, which include legal and application costs
related to the patent portfolio, are being amortized over 20 years, or the
lesser of the legal or the estimated economic life of the
patent.  Amortization of patent costs was $13,000 and $5,000 for the
three month period ended June 30, 2009 and 2008, respectively and was $25,000
and $8,000 for the six month period ended June 30, 2009 and 2008,
respectively.  Of the $2,009,000 in capitalized patents, $957,000
related to Proellex® patents and patent applications and $1,052,000 related
to Androxal® patents and patent applications.


19




We review
capitalized patent and patent application costs for impairment whenever events
or changes in circumstances indicate that the carrying amount of an asset may
not be recoverable.  An impairment exists when estimated undiscounted
cash flows expected to result from the patent are less than its carrying
amount.  The impairment loss recognized represents the excess of the
patent cost as compared to its estimated fair value.




Of the
$957,000 patent and patent application costs related to Proellex®, approximately
$407,000 relate to our Exclusive License Agreement with the NIH.  The
Company intends to discuss with the NIH its current financial status and obtain
appropriate assurances that the license will not be terminated in order to
facilitate a financing, but there can be no assurance that the Company will be
successful in its efforts. In the event that any of the conditions contained in
the license agreement for termination by the NIH are triggered, the Company's
license agreement may be terminated and the Company would incur an impairment
loss related to these capitalized patent and patent application
costs.




Additionally,
due to the Company’s financial situation, the Company concluded that it will no
longer seek to protect the specific matter covered in two Proellex® and one
Androxal® patent applications and will incur a loss of approximately $224,000 in
the third quarter of 2009 to abandon these assets. The remaining capitalized
patent and patent application costs were not impacted by the current FDA
clinical hold on the Proellex® clinical trials as the patents can continue to be
used, outlicensed or sold to third parties.




Should
the Company not continue development of Proellex and/or Androxal or should the
Company not continue as a going concern, capitalized patent and patent
application costs may not be recoverable, which would result in a charge to
operating results in the third or subsequent quarters.




Manufacturing
Agreement with Gedeon Richter for Proellex




In
December 2008, Repros committed to the purchase of at least $3 million of the
bulk active ingredient of Proellex® which is to be produced under a new
scaled-up amended manufacturing process by Gedeon Richter.  Under this
Purchase Request, as amended, the Company paid $750,000 in the first quarter of
2009 and $750,000 in the second quarter of 2009.  As of June 30, 2009,
$1.5 million is reflected under Prepaid Expenses and Other Current Assets on the
balance sheet.  Repros is obligated to make two additional payments of
$750,000 each for the final two batches of Proellex® to be delivered in the
third and fourth quarters of 2009.  The remaining two payments are due
based upon the delivery of finished product by Gedeon Richter and our acceptance
of the finished product, with the first such payment due no sooner than mid
August 2009 and the final payment due no sooner than mid January
2010.  As of August 17, 2009 the Company has not received any shipment
or accepted any product from Gedeon Richter of material produced from
the scaled up process. On June 26, 2009, Gedeon Richter notified Repros that the
material produced did not possess the required particle properties under the
revised Purchase Request. The Company is in the process of considering whether
such non-conforming material may still suit its purposes.  Should we
determine that such non-conforming material is acceptable and actually take
shipment of it, we may be required to pay Gedeon Richter an additional $750,000
owed upon delivery of the first two batches.  The Company intends to
discuss with Gedeon Richter an amendment to the Purchase Request in an effort to
reduce its future commitments and resolve the outcome of the non-conforming
batches of material.  At such time as we accept such material, we will
recognize the prior $1.5 million reflected as Prepaid Expenses and Other Current
Expenses as an expense associated with this purchase together with any
additional amounts payable.  If the Company is unable to make the
remaining payments as required under the terms of this Purchase Request, we may
not receive any of the finished product from Gedeon Richter and may not be
refunded any of the previously paid $1.5 million reflected under Prepaid
Expenses and Other Current Assets on our balance sheet, which may require
us to expense the $1.5 million prepaid asset. This Purchase Request provides
that all payments made to Gedeon Richter under the Purchase Request will be
returned if they can not meet their obligations under this Purchase Request by
March 31, 2010. It is anticipated that they will perform under the contract
and, therefore, we will not receive reimbursement. See Note 5 to the
Consolidated Financial Statements for a complete description of this
agreement.


20




Accrued
Expenses




We
estimate accrued expenses as part of our process of preparing financial
statements. Examples of areas in which subjective judgments may be required
include costs associated with services provided by contract organizations for
clinical trials, preclinical development and manufacturing of clinical
materials.  We accrue for costs incurred as the services are being
provided by monitoring the status of the trials or services provided and the
invoices received from our external service providers.  In the case of
clinical trials, a portion of the estimated cost normally relates to the
projected cost to treat a patient in our trials, and we recognize this cost over
the estimated term of the study based on the number of patients enrolled in the
trial on an ongoing basis, beginning with patient enrollment.  As
actual costs become known to us, we adjust our accruals.  To date, our
estimates have not differed significantly from the actual costs
incurred.  Since the clinical trials for Proellex have been put on
clinical hold by the FDA, we have focused our activities on closing down the
studies, and obtaining safety evaluations on all patients exiting the clinical
trials. It is difficult at this point to ascertain the exact costs associated
with such activities.  Subsequent changes in estimates may result in a
material change in our accruals, which could also materially affect our balance
sheet and results of operations.




R&D
Expense




Research
and development, or R&D, expenses include salaries and related employee
expenses, contracted regulatory affairs activities, insurance coverage for
clinical trials and prior product sales, contracted research and consulting
fees, facility costs, amortization of capitalized patent costs and internal
research and development supplies.  We expense research and
development costs in the period they are incurred.  These costs
consist of direct and indirect costs associated with specific projects as well
as fees paid to various entities that perform research on our
behalf.




Share-Based
Compensation




We had
two stock-based compensation plans at June 30, 2009, the 2000 Non-Employee
Directors' Stock Option Plan, or 2000 Director Plan and the 2004 Stock Option
Plan, or 2004 Plan.  We account for our stock-based compensation plans
under FASB Statement No. 123(R), "Share-Based Payments" ("SFAS
123(R)").  SFAS 123(R) generally requires the recognition of the cost
of employee services for share-based compensation based on the grant date fair
value of the equity or liability instruments issued.  Under SFAS
123(R), we use the Black-Scholes option pricing model to estimate the fair value
of our stock options.  Expected volatility is determined using
historical volatilities based on historical stock prices for a period equal to
the expected term.  The expected volatility assumption is adjusted if
future volatility is expected to vary from historical experience.  The
expected term of options represents the period of time that options granted are
expected to be outstanding and falls between the options' vesting and
contractual expiration dates.  The risk-free interest rate is based on
the yield at the date of grant of a zero-coupon U.S. Treasury bond whose
maturity period equals the option's expected term.




Income
Taxes




Our
losses from inception to date have resulted principally from costs incurred in
conducting clinical trials and in research and development activities related to
efforts to develop our products and from the associated administrative costs
required to support those efforts.  Under SFAS No. 109, "Accounting
for Income Taxes," a net operating loss ("NOL"), requires the recognition of
deferred tax assets.  As the Company has incurred losses since
inception, and since there is no certainty of future profits, a valuation
allowance has been provided in full on our deferred tax assets in the
accompanying consolidated financial statements.  If the Company has an
opportunity to use this NOL to off-set tax liabilities in the future, the use of
this asset would be restricted based on Internal Revenue Service, state and
local NOL use guidelines.


21




RECENT
ACCOUNTING PRONOUNCEMENTS




In
September 2006, FASB issued SFAS No. 157, "Fair Value Measurements" which
defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles and expands disclosures about fair
value measurements.  SFAS No. 157 is effective for financial
statements issued for fiscal years beginning after November 15, 2007 and interim
periods within those fiscal years.  FSP 157-2 "Partial Deferral of the
Effective Date of Statement 157" (FSP 157-2), deferred the effective date of
SFAS No. 157 for all nonfinancial assets and nonfinancial liabilities to fiscal
years beginning after November 15, 2008.  The implementation of SFAS
No. 157 for financial assets and financial liabilities, effective January 1,
2008, did not have a material impact on our consolidated financial position and
results of operations.  The implementation of SFAS No. 157 for
nonfinancial assets and nonfinancial liabilities did not have a material impact
on our consolidated financial position and results of operations.




In May
2009, the FASB issued SFAS No. 165, "Subsequent Events" (SFAS No.
165).  SFAS No. 165 provides guidance on management's assessment of
subsequent events and incorporates this guidance into accounting
literature.  SFAS No. 165 is effective prospectively for interim and
annual period ending after June 15, 2009.  The implementation of this
standard did not have a material impact on our consolidated financial position
and results of operations.  Subsequent events have been evaluated
through August 17, 2009, which is the date on which the financial statements
were issued.




Results
of Operations




Comparison
of the three-month and six-month periods ended June 30, 2009 and
2008




Revenues
and Other Income




Total
revenues and other income, which was comprised of interest income for the three
month and six month periods ended June 30, 2009 and 2008, decreased 99% to
$1,000 for the three month period ended June 30, 2009 as compared to $91,000 for
the same period in the prior year and decreased 99% to $4,000 for the six month
period ended June 30, 2009 as compared to $359,000 for the same period in the
prior year.  The decrease for the three and six month periods ended
June 30, 2009 was primarily due to lower combined cash, cash equivalents and
marketable securities balances and reduced interest rate yields that have
occurred as we moved our cash investments solely into a money market mutual
fund.




Research
and Development Expenses




Research
and development, or R&D, expenses include contracted services relating to
our clinical product development activities which include preclinical studies,
clinical trials, regulatory affairs and bulk manufacturing scale-up activities
and bulk active ingredient purchases for preclinical and clinical trials
primarily relating to our two products in clinical development, which are
Proellex® and Androxal®.  Research and development expenses also
include internal operating expenses relating to our general research and
development activities.  R&D expenses increased 42% or
approximately $2.3 million to $7.8 million for the three month period ended June
30, 2009 as compared to $5.5 million for the same period in the prior
year.  Our primary R&D expenses for the three month periods ended
June 30, 2009 and 2008 are shown in the following table (in
thousands):




Research and Development
                
                Three-months
                  June 30, 2009
                
                
                Three-months
                  June 30, 2008
                
                
                Variance
                
                
                Change
                  (%)Proellex®
      clinical development
                
                $
                6,754
                
                
                $
                3,717
                
                
                $
                3,037
                
                
                
                82
                %Androxal®
      clinical development
                
                
                363
                
                
                
                1,107
                
                
                
                (744
                )
                
                
                (67
                )%Payroll
      and benefits
                
                
                410
                
                
                
                249
                
                
                
                161
                
                
                
                65
                %Operating
      and occupancy
                
                
                257
                
                
                
                402
                
                
                
                (145
                )
                
                
                (36
                )%Total
                
                $
                7,784
                
                
                $
                5,475
                
                
                $
                2,309
                
                
                
                42
                %


22





R&D
expenses increased 16% or approximately $1.8 million to $13.5 million for the
six month period ended June 30, 2009 as compared to $11.6 million for the same
period in the prior year.  Our primary R&D expenses for the six
month periods ended June 30, 2009 and 2008 are shown in the following table (in
thousands):





Research and Development
                
                Six-months
                  June 30, 2009
                
                
                Six-months
                  June 30, 2008
                
                
                Variance
                
                
                Change
                  (%)Proellex®
      clinical development
                
                $
                11,471
                
                
                $
                8,356
                
                
                $
                3,115
                
                
                
                37
                %Androxal®
      clinical development
                
                
                710
                
                
                
                2,077
                
                
                
                (1,367
                )
                
                
                (66
                )%Payroll
      and benefits
                
                
                826
                
                
                
                484
                
                
                
                342
                
                
                
                71
                %Operating
      and occupancy
                
                
                475
                
                
                
                723
                
                
                
                (248
                )
                
                
                (34
                )%Total
                
                $
                13,482
                
                
                $
                11,640
                
                
                $
                1,842
                
                
                
                16
                %




To date through June 30, 2009 we have
incurred approximately $48.2 million for the development of Proellex® and
approximately $14.3 million for the development of Androxal®.  These
accumulated costs exclude any internal operating expenses.  Before the
recent clinical hold on further Proellex® development we were developing
Proellex® for three indications which included a pre-surgical treatment of
anemia associated with uterine fibroids, a chronic treatment of symptoms
associated with uterine fibroids and as a chronic treatment of symptoms
associated with endometriosis.  We are currently developing Androxal®
as a treatment for men with low testosterone that want to maintain their
fertility.  In addition, we are exploring the feasibility of
developing Androxal® as a treatment for type 2 diabetes.  Prior to
2008, we were developing Androxal® as a treatment for men with low testosterone
due to secondary hypogonadism.




Androxal®




Androxal®
clinical development expenses decreased 67% or approximately $744,000 to
$363,000 for the three month period ended June 30, 2009 as compared to $1.1
million for the same period in the prior year.  The decrease in
Androxal® clinical development expenses is shown in the following table (in
thousands):




Androxal® Clinical
                  Development
                
                Three-months
                  June 30, 2009
                
                
                Three-months
                  June 30, 2008
                
                
                Variance
                
                
                Change
                  (%)Clinical
      trials
                
                $
                297
                
                
                $
                674
                
                
                $
                (377
                )
                
                
                (56
                )%Preclinical
      studies
                
                
                24
                
                
                
                306
                
                
                
                (282
                )
                
                
                (92
                )%Formulation
      and dosage
                
                
                10
                
                
                
                111
                
                
                
                (101
                )
                
                
                (91
                )%Other
                
                
                32
                
                
                
                16
                
                
                
                16
                
                
                
                100
                %Total
                
                $
                363
                
                
                $
                1,107
                
                
                $
                (744
                )
                
                
                (67
                )%





Androxal®
clinical development expenses decreased 66% or approximately $1.4 million to
$710,000 for the six month period ended June 30, 2009 as compared to $2.1
million for the same period in the prior year.  The decrease in
Androxal® clinical development expenses is shown in the following table (in
thousands):




Androxal® Clinical
                  Development
                
                Six-months
                  June 30, 2009
                
                
                Six-months
                  June 30, 2008
                
                
                Variance
                
                
                Change
                  (%)Clinical
      trials
                
                $
                356
                
                
                $
                910
                
                
                $
                (554
                )
                
                
                (61
                )%Preclinical
      studies
                
                
                282
                
                
                
                1,024
                
                
                
                (742
                )
                
                
                (72
                )%Formulation
      and dosage
                
                
                10
                
                
                
                125
                
                
                
                (115
                )
                
                
                (92
                )%Other
                
                
                62
                
                
                
                18
                
                
                
                44
                
                
                
                244
                %Total
                
                $
                710
                
                
                $
                2,077
                
                
                $
                (1,367
                )
                
                
                (66
                )%


23




Prior to
2008 we were developing Androxal® as a treatment for testosterone deficiency due
to secondary hypogonadism by restoring normal testosterone production in males
with functional testes.  As a result of a Type "C" meeting held with
the Food and Drug Administration, or FDA, on October 15, 2007 we believe that we
do not have a clear clinical path to develop Androxal® for this indication in
the U.S. at this time and discontinued clinical efforts for that indication
except for the continuation of a long-term Open Label Safety study that was
already underway and we believe could be used as safety data for our other
indications.  During 2008 we initiated a clinical development program
with Androxal® as a treatment for men being treated for low testosterone that
want to maintain their fertility.




Clinical
trial expenses during the three and six month periods ended June 30, 2009
primarily reflect a Phase 2b proof-of-concept clinical
trial.  Clinical trial expenses during the three and six month periods
ended June 30, 2008 primarily reflect a long-term Open Label Safety
study.  Preclinical study expenses for both three and six month
periods ended June 30, 2009 and 2008 reflect animal safety activities required
by the FDA to file a NDA.




Proellex®




Proellex®
clinical development expenses increased 82% or approximately $3.0 million to
$6.8 million for the three month period ended June 30, 2009 as compared to $3.7
million for the same period in the prior year.  The increase in
Proellex® clinical development expenses is shown in the following table (in
thousands):





Proellex® Clinical
                  Development
                
                Three-months
                  June 30, 2009
                
                
                Three-months
                  June 30, 2008
                
                
                Variance
                
                
                Change
                  (%)Clinical
      trials
                
                $
                6,081
                
                
                $
                2,842
                
                
                $
                3,239
                
                
                
                114
                %Preclinical
      studies
                
                
                222
                
                
                
                537
                
                
                
                (315
                )
                
                
                (59
                )%Formulation
      and dosage
                
                
                125
                
                
                
                294
                
                
                
                (169
                )
                
                
                (57
                )%Other
                
                
                326
                
                
                
                44
                
                
                
                282
                
                
                
                641
                %Total
                
                $
                6,754
                
                
                $
                3,717
                
                
                $
                3,037
                
                
                
                82
                %





Proellex®
clinical development expenses increased 37% or approximately $3.1 million to
$11.5 million for the six month period ended June 30, 2009 as compared to $8.4
million for the same period in the prior year.  The increase in
Proellex® clinical development expenses is shown in the following table (in
thousands):





Proellex® Clinical
                  Development
                
                Six-months
                  June 30, 2009
                
                
                Six-months
                  June 30, 2008
                
                
                Variance
                
                
                Change
                  (%)Clinical
      trials
                
                $
                10,144
                
                
                $
                6,500
                
                
                $
                3,644
                
                
                
                56
                %Preclinical
      studies
                
                
                445
                
                
                
                1,280
                
                
                
                (835
                )
                
                
                (65
                )%Formulation
      and dosage
                
                
                467
                
                
                
                405
                
                
                
                62
                
                
                
                15
                %Other
                
                
                415
                
                
                
                171
                
                
                
                244
                
                
                
                143
                %Total
                
                $
                11,471
                
                
                $
                8,356
                
                
                $
                3,115
                
                
                
                37
                %


24


Prior to
2008 we were developing Proellex® for two indications which included a chronic
treatment of symptoms associated with uterine fibroids and
endometriosis.  During the first quarter of 2008 we filed an IND with
Proellex® for a new indication as a short course pre-surgical treatment of
anemia associated with uterine fibroids.  Proellex® clinical expenses
for the three and six month periods ended June 30, 2009 and 2008 include Phase
1, Phase 2, Phase 3 and long-term Open Label Safety study
activities.




Preclinical
study expenses reflect animal safety activities required by the FDA to file a
NDA.  Formulation and dosage expenses reflect activities associated
with the bulk scale-up and purchase of active drug to conduct clinical trials
and to meet any potential future NDA submission requirements.




On August
3, 2009, we suspended all ongoing clinical trials of Proellex® pending
resolution of certain safety issues relating to such trials as described more
fully above.




Payroll
and Benefits




R&D
payroll and benefit expenses include salaries, non-cash stock option
compensation expense and fringe benefits which increased 65% or approximately
$161,000 to $410,000 for the three month period ended June 30, 2009 as compared
to $249,000 for the same period in the prior year.  This increase is
primarily due to an increase in headcount and an increase in non-cash stock
option compensation of $66,000. Included in payroll and benefit expense is a
charge for non-cash stock option expense of $148,000 for the three month period
ended June 30, 2009 as compared to $82,000 for the same period in the prior
year.




R&D
payroll and benefit expenses increased 71% or approximately $342,000 to $826,000
for the six month period ended June 30, 2009 as compared to $484,000 for the
same period in the prior year.  This increase is primarily due to an
increase in headcount and an increase in non-cash stock option compensation of
$140,000. Included in payroll and benefit expense is a charge for non-cash stock
option expense of $290,000 for the six month period ended June 30, 2009 as
compared to $150,000 for the same period in the prior year.




Operating
and Occupancy




R&D
operating and occupancy decreased 36% or approximately $145,000 to approximately
$257,000 for the three month period ended June 30, 2009 as compared to $402,000
for the same period in the prior year.  The decrease is primarily due
to a decrease in clinical development related consulting expenses of
approximately $96,000 and a decrease in travel related expenses of
$50,000.




R&D
operating and occupancy decreased 34% or approximately $248,000 to approximately
$475,000 for the six month period ended June 30, 2009 as compared to $723,000
for the same period in the prior year.  The decrease is primarily due
to a decrease in clinical development related consulting expenses of
approximately $167,000 and a decrease in travel expenses of
$63,000.




General
and Administrative Expenses




General
and administrative expenses, or G&A, increased 60% to approximately $1.1
million for the three month period ended June 30, 2009 as compared to $689,000
for the same period in the prior year.  Our primary G&A expenses
for the three month period ended June 30, 2009 and 2008 are shown in the
following table (in thousands):


25




General andAdministrative
                
                Three-months
                  June 30, 2009
                
                
                Three-months
                  June 30, 2008
                
                
                Variance
                
                
                Change
                  (%)Payroll
      and benefits
                
                $
                620
                
                
                $
                336
                
                
                $
                284
                
                
                
                85
                %Operating
      and occupancy
                
                
                485
                
                
                
                353
                
                
                
                132
                
                
                
                37
                %Total
                
                $
                1,105
                
                
                $
                689
                
                
                $
                416
                
                
                
                60
                %




G&A
payroll and benefit expense include salaries, bonuses, non-cash stock option
compensation expense and fringe benefits.  Included in payroll and
benefit expense is a charge for non-cash stock option expense of $253,000 for
the three month period ended June 30, 2009 as compared to $117,000 for the same
period in the prior year.  Additionally, salaries for the three month
period ended June 30, 2009 were $325,000 as compared to $192,000 for the same
period in the prior year.  The increase in salaries is primarily due
to an increase in headcount.




G&A
operating and occupancy expenses, which include expenses to operate as a public
company, increased 37% or approximately $132,000 to $485,000 for the three month
period ended June 30, 2009 as compared to $353,000 for the same period in the
prior year.  The increase is primarily due to an increase in legal and
consulting services of $88,000 and an increase in travel expenses of
$25,000.




General
and administrative expenses, or G&A, increased 46% to approximately $2.2
million for the six month period ended June 30, 2009 as compared to $1.5 million
for the same period in the prior year.  Our primary G&A expenses
for the six month period ended June 30, 2009 and 2008 are shown in the following
table (in thousands):




General andAdministrative
                
                Six-months
                  June 30, 2009
                
                
                Six-months
                  June 30, 2008
                
                
                Variance
                
                
                Change
                  (%)Payroll
      and benefits
                
                $
                1,094
                
                
                $
                682
                
                
                $
                412
                
                
                
                60
                %Operating
      and occupancy
                
                
                1,071
                
                
                
                803
                
                
                
                268
                
                
                
                33
                %Total
                
                $
                2,165
                
                
                $
                1,485
                
                
                $
                680
                
                
                
                46
                %




G&A
payroll and benefit expense include salaries, bonuses, non-cash stock option
compensation expense and fringe benefits.  Included in payroll and
benefit expense is a charge for non-cash stock option expense of $445,000 for
the six month period ended June 30, 2009 as compared to $241,000 for the same
period in the prior year.  Additionally, salaries for the six month
period ended June 30, 2009 were $563,000 as compared to $384,000 for the same
period in the prior year.  The increase in salaries is primarily due
to an increase in headcount.




G&A
operating and occupancy expenses, which include expenses to operate as a public
company, increased 33% or approximately $268,000 to $1.1 million for the six
month period ended June 30, 2009 as compared to $803,000 for the same period in
the prior year.  The increase is primarily due to an increase in legal
and consulting services of $196,000 and an increase in travel expenses of
$59,000.




Off-Balance
Sheet Arrangements




As of
June 30, 2009, the only off-balance sheet arrangement we have is the operating
lease relating to our facility.


26


Liquidity
and Capital Resources
  Since our
inception, we have financed our operations primarily with proceeds from private
placements and public offerings of equity securities and with funds received
under collaborative agreements.  We have experienced negative cash
flows from operations since inception and have funded our activities to date
primarily from equity financings and corporate collaborations.  We
will require substantial funds for research and development, including
preclinical studies and clinical trials of our product candidates, and to
commence sales and marketing efforts if appropriate, if the FDA or other
regulatory approvals are obtained.  Based on our existing and
projected accounts payable and commitments, we believe we do not have sufficient
cash to continue normal operations and need to raise additional capital
immediately in order to continue operations on a normal basis.  In the
event that we are unable to obtain adequate financing to meet our immediate
short term liquidity needs, we will pursue other options, including but not
limited to, additional reductions of expenses, sale of the Company, sale or
license of a portion or all of our assets, a bankruptcy filing or the
liquidation of the Company.
  On
October 2, 2008, we completed a direct registered offering of 2.4 million shares
of our common stock at a purchase price of $6.50 per share for net proceeds
after expenses of approximately $15.6 million pursuant to an effective shelf
registration statement.
  In
November 2008, we filed a Form S-3 shelf registration statement (Reg. No.
333-155265) to register up to 6,282,052 shares of our common stock, which
includes 1,282,052 shares related to certain purchase options related to the
offering described above and an additional 5 million shares for future
offerings.  This registration statement was declared effective on
November 26, 2008 and remains effective for three years after such date unless
earlier terminated or expired. However,
due to the decline in the Company’s stock price and the Company’s resulting
market capitalization, after June 30, 2009, and based on the rules applicable to
Form S-3, the Company is not able to utilize such shelf registration statement
for a period of time after August 28, 2009 assuming our stock price remains at
or near current levels. The amount of funds that the Company can raise under
such shelf registration is also limited, given the current stock price of the
Company’s common stock and the fact that there are only 5,000,000 shares
available for issuance in connection with a potential
financing.
  Our
primary use of cash to date has been in operating activities to fund research
and development, including preclinical studies and clinical trials, and general
and administrative expenses.  We had cash and cash equivalents of
approximately $4.0 million as of June 30, 2009 as compared to cash, cash
equivalents and marketable securities of $19.5 million as of December 31,
2008.
  Net cash
of approximately $15.2 million and $11.9 million was used in operating
activities during the six month period ended June 30, 2009 and 2008,
respectively.  The major use of cash for operating activities during
the second quarter of 2009 was to fund our clinical development programs and
associated administrative costs.
  Our
capital requirements will depend on many factors, including: the costs
associated with the suspension of dosing in our clinical trials relating to
Proellex® and the potential costs to reestablish the dosing in such clinical
trials should the FDA’s clinical hold be lifted; the costs and timing of seeking
regulatory approvals of our products; our ability to reduce or renegotiate our
existing accounts payable and accrued expenses with our consultants and vendors;
the problems, delays, expenses and complications frequently encountered by
development stage companies; the progress of our preclinical and clinical
activities; the costs associated with any future collaborative research,
manufacturing, marketing or other funding arrangements; our ability to obtain
regulatory approvals; the success of our potential future sales and marketing
programs; the cost of filing, prosecuting and defending and enforcing any patent
claims and other intellectual property rights; changes in economic, regulatory
or competitive conditions of our planned business; and additional costs
associated with being a publicly-traded company. To satisfy our capital
requirements, we are exploring ways to immediately raise additional
funds.  Our announcements regarding the liver toxicity in our
Proellex®clinical trials have significantly depressed our stock price and, these
announcements, along with the clinical hold imposed by the FDA, receipt of the
Nasdaq letter regarding our failure to meet the current Nasdaq listing
requirements and recent announcement of the class action lawsuit have severely
impaired our ability to raise additional capital funds or to outlicense the
technology to where it could be difficult or impossible for us to raise any
additional capital.  There can be no assurance that any such funding
will be available to us on favorable terms or at all.  If we are
successful in obtaining additional financing, we anticipate that such financing
will result in significant dilution of the ownership interests of our current
stockholders and may provide certain rights to the new investors senior to the
rights of our current stockholders, including but not limited to voting rights
and rights to proceeds in the event of a sale or liquidation of the
Company.  The uncertainties relating to the foregoing matters raise
substantial doubt about our ability to continue as a going
concern.  Our financial statements do not include any adjustments that
might result from the outcome of these uncertainties.
  27
  Our
results of operations may vary significantly from quarter to quarter and year to
year, and depend, among other factors, on our ability to raise additional
capital on acceptable terms or at all, on our ability to be successful in our
clinical trials, the regulatory approval process in the United States and other
foreign jurisdictions and the ability to complete new licenses and product
development agreements.  The timing of our revenues may not match the
timing of our associated product development expenses.  To date,
research and development expenses have generally exceeded revenue in any
particular period and/or fiscal year.
  Item
3.  Quantitative and Qualitative Disclosures About Market
Risk
  Interest Rate Risk.We had
cash and cash equivalents of approximately $4.0 million at June 30, 2009 which
is held in an account backed by U.S. government securities.  Although
this cash account is subject to fluctuations in interest rates and market
conditions, no significant gain or loss on this account is expected to be
recognized in earnings.  We do not invest in derivative
securities.
  Item
4.  Controls and Procedures
  Disclosure
Controls and Procedures
  Based on
their evaluation as of the end of the period covered by this Quarterly Report on
Form 10-Q, our Chief Executive Officer and Chief Financial Officer have
concluded that our disclosure controls and procedures (as defined in
Rule 13a-15(e)) under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), were effective as of June 30, 2009.
  Changes
in Internal Control over Financial Reporting
  In
connection with the evaluation described above, we identified no change in
internal control over financial reporting that occurred during the quarter ended
June 30, 2009 that has materially affected, or is reasonably likely to
materially affect, our internal control over financial
reporting.
  28
  PART
II - OTHER INFORMATION
 
 Item
1.  Legal Proceedings
  On August
7, 2009,  R.M. Berry filed a putative class action lawsuit naming the
Company, Joseph Podolski, Paul Lammers, and Louis Ploth, Jr. as
defendants.  The lawsuit is pending in the United States District Court for
the Southern District of Texas, Houston Division.  The lawsuit, styled R.M.
Berry, on Behalf of Himself and all Others Similarly Situated v. Repros
Therapeutics, Inc., Joseph Podolski, Paul Lammers, and Louis Ploth, Jr., alleges
that the defendants made certain misleading statements related to the Company’s
Proellex drug.  Among other claims, the lawsuit contends that the
defendants misrepresented the side effects of the drug related to liver
function, and the risk that these side effects could cause a suspension of
clinical trials of Proellex. The lawsuit seeks to establish a class of
shareholders allegedly harmed by the misleading statements, and asserts causes
of action under the Securities Exchange Act of 1934.  To date, no
proceedings of any kind have occurred in the lawsuit, and an estimate of the
possible loss or range of loss in connection with the lawsuit cannot be
made.  On August 14, 2009, a lawsuit making similar allegations and naming
the same defendants was also filed in the United States District Court for the
Southern District of Texas.  This suit is styled Josephine Medina, Individually and
On Behalf of all Others Similarly Situated v. Repros Therapeutics, Inc., Joseph
Podolski, Paul Lammers, and Louis Ploth, Jr.  To date, no
proceedings of any kind have occurred in the lawsuit, and an estimate of the
possible loss or range of loss in connection with the lawsuit cannot be made.
 The Company has retained counsel to assist it in defending both these
action.
  On August
10, 2009, a vendor of the Company filed a lawsuit naming the Company as a
defendant.  The lawsuit claims the Company owes it $147,000 in
accordance with the terms of its agreement with the Company.  To date,
no proceedings of any kind have occurred in the lawsuit, and an estimate of the
possible loss or range of loss in connection with the lawsuit cannot be
made.  The Company has retained counsel to assist it in defending this
action.
  Our
issued patents and patent applications for Androxal® relate to methods and
compositions for treating certain conditions including the treatment of
testosterone deficiency in men, the treatment of metabolic syndrome and
conditions associated therewith, and the treatment of infertility in hypogonadal
men.  Androxal® (the trans-isomer of clomiphene) is purified from
clomiphene citrate.  A third party individual holds two issued patents
related to the use of an anti-estrogen such as clomiphene citrate and others for
use in the treatment of androgen deficiency and disorders related
thereto.  In our prior filings with the SEC, we have described our
request to the U.S. Patent and Trademark Office, or PTO, for re-examination of
one of these patents based on prior art.  The third party amended the
claims in the re-examination proceedings, which led the PTO to determine that
the amended claims are patentable in view of those publications under
consideration and a re-examination certificate was issued.  However,
we believe that the amended claims are invalid based on additional prior art
publications, and its request for re-examination by the PTO in light of a number
of these additional publications and other publications cited by the PTO, has
been granted.  All of the claims challenged by us have been finally
rejected in the re-examination and the patent holder has appealed the rejections
to the PTO Board of Patent Appeals and Interferences.  An oral hearing
was held on July 15, 2009, and no decision has been rendered following the oral
hearing as of the date of this quarterly report.  We also believe that
the second of these two patents is invalid in view of published prior art not
considered by the PTO.  Nevertheless, there is no assurance that
either patent will ultimately be found invalid over the prior art.  If
such patents are not invalidated by the PTO, we may be required to obtain a
license from the holder of such patents in order to develop Androxal® further or
attempts may be made to undertake further legal action to invalidate such
patents.  If such licenses were not available on acceptable terms, or
at all, we may not be able to successfully commercialize or out-license
Androxal®.
  Item
1A. Risk Factors
  Other
than the additional risk factors included below, there were no material changes
from the risk factors previously disclosed in the registrant’s Form 10-K for the
fiscal year ended December 31, 2008 in response to “Item 1A. Risk
Factors” to Part I of Form 10-K.
  29
  Our
ability to continue as a going concern requires that we raise additional funds
immediately, without which we will need to cease our business operations and
begin bankruptcy or liquidation proceedings.
  Our
ability to continue as a going concern is dependent upon our ability to obtain
immediate financing, our ability to control our operating expenses and our
ability to achieve a level of revenues adequate to support our capital and
operating requirements. In particular, we are exploring various financing
alternatives to address our immediate short term liquidity needs. No assurance
can be given that we will be successful in obtaining financing on acceptable
terms or at all.  We anticipate that if we are able to secure
financing, that such financing will result in significant dilution of the
ownership interests of our current stockholders and may provide certain rights
to the new investors senior to the rights of our current stockholders, including
but not limited to voting rights and rights to proceeds in the event of a sale
or liquidation of the Company. The current FDA clinical hold of our clinical
trials for Proellex® will make it more difficult for us to obtain additional
financing. In addition, the recently filed class action lawsuit will make our
ability to raise funds even more difficult. As described above, we expect to
continue to incur significant losses for the foreseeable future, and we may
never achieve or sustain profitability. In the event that we are unable to
obtain adequate financing to meet our immediate short term liquidity needs, we
will need to cease our business operations and begin bankruptcy or liquidation
proceedings.
  We
may need to seek protection under the provisions of the U.S. Bankruptcy Code,
and in that event, it is unlikely that stockholders would receive any value for
their shares.
  We have
not generated any significant revenues to date, and we have incurred losses
in each year since our inception. As of June 30, 2009, we had approximately $4.0
million in cash and cash equivalents and our accounts payable and accrued
expenses were approximately $7.5 million. Furthermore, as of August 14, 2009, we
had approximately $2.7 million in cash and cash equivalents. Our
accounts payable and accrued expenses as of August 14, 2009 is significantly
higher than it was at the end of the second quarter. Several vendors have ceased
performing any work for us and have recently notified the Company of claims,
which includes amounts due upon termination of work, and in one case filed suit
against us for payment of $147,000, which such vendor claims it is owed under
their agreement with the Company. We have a dispute with one clinical research
organization regarding the billings and suitability of work provided to the
Company. These billings are not reflected in these financial statements. We are
investigating such invoices and claims. In addition, we are reviewing our
obligations under our agreements with our contract research organizations to
determine the extent of our obligations thereunder.As a result,
the  amount of cash on hand is not sufficient to continue to fund our
ongoing clinical trials of Androxal®, complete all
necessary activities relating to the suspension of our clinical trial program
for Proellex®, pay our accounts payable and accrued expenses as well as our
normal corporate overhead and expenses. We cannot assure you that any actions
that we take would raise or generate sufficient capital to fully address the
uncertainties of our financial position. As a result, we may be unable to
realize value from our assets and discharge our liabilities in the normal course
of business. If we are unable to settle our obligations to our creditors or if
we are unable to obtain financing to support continued satisfaction of our
obligations, we may need to seek protection under the provisions of the U.S.
Bankruptcy Code. In that event, we may seek to reorganize our business, or we or
a trustee appointed by the court may be required to liquidate our assets. In
either of these events, whether the stockholders receive any value for their
shares is highly uncertain. If we needed to liquidate our assets, we would
likely realize significantly less from them than the values at which they are
carried on our financial statements. The funds resulting from the liquidation of
our assets would be used first to pay off the debt owed to any secured and
unsecured creditors before any funds would be available to pay our stockholders,
and any shortfall in the proceeds would directly reduce the amounts available
for distribution, if any, to our creditors and to our stockholders. In the event
we were required to liquidate under the federal bankruptcy laws, it is highly
unlikely that stockholders would receive any value for their
shares.
  In
addition, the Company’s Exclusive License Agreement, as amended, with the
National Institutes of Health (NIH) dated April 16, 1999 relating to Proellex®
requires that the Company raise no less than $6,000,000 on or before September
30, 2009, and additionally provides that the license may be terminated by the
NIH immediately upon notice to the Company following a filing of a petition in
bankruptcy or a letter from the Company to the NIH stating that it is
insolvent.  The Company intends to discuss with the NIH its current
financial status and obtain appropriate assurances that the license will not be
terminated in order to facilitate a financing, but there can be no assurance
that the Company will be successful in its efforts. In the event that any of the
conditions contained in the license agreement for termination by the NIH
are triggered, the Company's license agreement may be terminated and the Company
would lose its exclusive rights to Proellex®.  Any such termination of the
license agreement could have a material adverse effect on the Company's
operations, and in such event, the value of your stockholdings in the Company
would be materially adversely affected.
  30
  We
have identified a dose-related increase in liver enzymes in Proellex® clinical
trial patients, leading to the suspension of Proellex® studies and the FDA's
notice of clinical hold on all Proellex® clinical trials.
  In our
clinical trials program for Proellex®, we identified a dose-related increase in
liver enzymes in a limited number of patients that resulted in our decision to
suspend all clinical trials relating to Proellex®.  Shortly
thereafter, the FDA placed all Proellex® clinical studies on
hold.  There can be no assurance whether and when the FDA will remove
the clinical hold; whether Proellex® can be further developed, financed or
commercialized in a timely manner without significant additional studies or
patient data or significant expense; and whether any future development will be
sufficient to support product approval.  If we are unable to resolve
the FDA's concerns, we will not be able to proceed further to obtain regulatory
approval for Proellex®.
  We
have no clear clinical path for Androxal® at this time.
 
 We are
developing Androxal® for men of reproductive age with low testosterone levels
who want to maintain their fertility while being treated for their low
testosterone condition. During the second quarter of 2008, we initiated a Phase
2b proof-of-concept clinical trial in which we are monitoring the effects of
Androxal® on male fertility and testicular function in patients being treated
for low testosterone as compared to Testim®, a popular marketed topical
testosterone medication. We anticipate holding a meeting with the FDA during the
second half of 2009, provided that sufficient funds can be raised to continue
development of this product. Given that there is already an acceptable treatment
regimen for men with low testosterone, there is significant uncertainty as to
whether or not an additional approach such as Androxal® would be approved by the
FDA or accepted in the market. At this time it is too early in the clinical
development process to estimate when or even if an NDA for Androxal® will be
submitted for this indication.
  We
are  currently not in compliance with NASDAQ rules for continued
listing on the NASDAQ Global Market and are at risk of being delisted, which may
subject us to the SEC’s penny stock rules and decrease the liquidity of our
common stock.
 
 On August
7, 2009, we received notice from The NASDAQ Stock Market that the market value
of our listed securities has been below the minimum $50,000,000 requirement for
continued inclusion by NASDAQ Listing Rule 5450(b)(2)(A).  We have
been provided until November 5, 2009 to regain compliance.  If we do
not demonstrate compliance by such date, our securities will be delisted from
The NASDAQ Global Market.
  If we are
delisted from The NASDAQ Global Market, and are unsuccessful in moving to The
Nasdaq Capital Market, our common stock may be traded over-the-counter on the
OTC Bulletin Board or in the “pink sheets.”  These alternative
markets, however, are generally considered to be less efficient than The NASDAQ
Global Market.  Many over-the-counter stocks trade less frequently and
in smaller volumes than securities traded on the NASDAQ markets, which would
likely have a material adverse effect on the liquidity of our common
stock.
 
 If our
common stock is delisted from The NASDAQ Global Market, there may be a limited
market for our stock, trading in our stock may become more difficult and our
share price could decrease even further.  In addition, if our common
stock is delisted, our ability to raise additional capital may be
impaired.
 
 In
addition, our common stock may become subject to penny stock
rules.  The SEC generally defines “penny stock” as an equity security
that has a market price of less than $5.00 per share, subject to certain
exceptions.  We are not currently subject to the penny stock rules
because our common stock qualifies for an exception to the SEC’s penny stock
rules for companies that have an equity security that is quoted on The NASDAQ
Stock Market.  However, if we were delisted, our common stock would
become subject to the penny stock rules, which impose additional sales practice
requirements on broker-dealers who sell our common stock.  If our
common stock were considered penny stock, the ability of broker-dealers to sell
our common stock and the ability of our stockholders to sell their shares in the
secondary market would be limited and, as a result, the market liquidity for our
common stock would be adversely affected.  We cannot assure that
trading in our securities will not be subject to these or other regulations in
the future.
  31
 
 The
Company and certain of its officers and directors were named as a party in a
class action lawsuit which could result in a material adverse affect on our
business and financial condition.
 
 The
Company and certain of its officers were named as a party in a shareholder class
action lawsuit alleging, among other things, that the Company and such officers
violated certain provisions of the Securities Exchange Act of 1934 by issuing
materially false and misleading press releases regarding the results of clinical
trials for its drug Proellex.  Our bylaws require us to indemnify our
officers in certain proceedings, subject to certain limited exceptions. In
addition, each of our directors has an indemnification agreement with the
Company providing for certain additional indemnification benefits for such
persons in the event of a lawsuit.  As a result of the class action
lawsuit, we are obligated to pay for certain costs and expenses of our officers
and directors and may be liable for substantial damages, costs and expenses if
such class action is successful.  Such litigation could also divert
the attention of our management and our resources in general from day-to-day
operations.  Further, it is possible that additional claims beyond those
that have already been filed will be brought by the current plaintiffs or by
others in an effort to seek monetary relief from us.
 
 Additionally, such class
action lawsuit is covered by the Company's director and officer insurance
policy.  In the event there is an adverse judgment against the Company in
such lawsuit, the Company's insurance coverage may not be adequate to cover such
judgment and the Company's cash position may not be sufficient to satisfy such
judgment. Such adverse judgment could have a material and adverse affect on the
Company.
 
 Item
4.  Submission of Matters to a Vote of Security Holders
  The 2009
Annual Meeting of the Company's stockholders was held on May 20, 2009 to
consider and vote upon the following proposals:
  (1)
Election of Directors.  The following individuals were nominated and
elected as directors, with the following number of shares voted for and withheld
with respect to each director.
 
 For
                  
                  
                  WithheldJoseph
      S. Podolski
                  
                  
                  13,840,092
                  
                  
                  
                  94,591Mark
      Lappe
                  
                  
                  13,834,896
                  
                  
                  
                  99,787Daniel
      F. Cain
                  
                  
                  13,830,853
                  
                  
                  
                  103,830Jean
      Fourcroy, M.D., Ph.D., M.P.H.
                  
                  
                  13,834,975
                  
                  
                  
                  99,708Stephen
      B. Howell, M.D.
                  
                  
                  13,835,467
                  
                  
                  
                  99,216Nola
      Masterson
                  
                  
                  13,688,460
                  
                  
                  
                  246,223John
      C. Reed, M.D., Ph.D.
                  
                  
                  13,701,666
                  
                  
                  
                  233,017
 
 (2) To
consider and act upon a proposal to amend our 2004 Stock Option Plan, as
amended, to increase the number of shares of common stock issuable under the
2004 Stock Option Plan, as amended, by 1,000,000 shares;
 
 For  8,809,146          Against
376,504          Abstain  37,420          Non-Votes
4,711,611
 
 (3)  To
consider and act upon a proposal to amend our 2000 Non-Employee Directors' Stock
Option Plan, as amended, to increase the number of shares of common stock
issuable under the 2000 Non-Employee Directors' Plan, as amended, by 500,000
shares;
 
 For
8,798,573          Against  383,531          Abstain   40,966          Non-Votes
4,711,613
  32
 
 (4) To
ratify the election of PricewaterhouseCoopers LLP as the Company's registered
independent public accounting firm for the fiscal year-ended December 31,
2009.
 
 For
13,614,350                        Against   235,243                      Abstain   85,090
 
 Item
5.  Other Information
  None
  Item
6.    Exhibits
  3.1(a)
              Restated
      Certificate of Incorporation (incorporated by reference to Exhibit 3.3 to
      the Company's Registration Statement on Form SB-2 (No. 33-57728-FW), as
      amended ("Registration
Statement")).
 3.1(b)
              Certificate
      of Amendment to the Company's Restated Certificate of Incorporation, dated
      as of May 2, 2006 (incorporated by reference to Exhibit 3.1 to the
      Company's Current Report on Form 8-K as filed with the Securities and
      Exchange Commission (the "Commission") on May 2,
  2006).
 3.1(c)
              Certificate
      of Amendment to the Company's Restated Certificate of Incorporation, as
      amended, dated as of December 16, 2008 (incorporated by reference to
      Exhibit 3.1(d) to the Company's Current Report on Form 8-K as filed with
      the Commission on December 23,
2008).
 3.1(d)
              Certificate
      of Designation of Series One Junior Participating Preferred Stock dated
      September 2, 1999 (incorporated by reference to Exhibit A to Exhibit 4.1
      to the Company's Registration Statement on Form 8-A as filed with the
      Commission on September 3, 1999).
 3.2
              Restated
      Bylaws of the Company (incorporated by reference to Exhibit 3.4 to the
      Registration Statement).
 31.1*
              Certification
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of
      the Sarbanes-Oxley Act of 2002 (Chief Executive
  Officer).
 31.2*
              Certification
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of
      the Sarbanes-Oxley Act of 2002 (Chief Financial
  Officer).
 32.1*
              Certification
      furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
      Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive
      Officer).
 32.2*
              Certification
      furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
      Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Financial
      Officer).
 *
              Filed
      herewith.
  33
  SIGNATURES
 
 In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
 
 REPROS
      THERAPEUTICS INC.Date:  August
      17, 2009By:
                /s/ Joseph S. PodolskiJoseph
      S. PodolskiChief
      Executive Officer and Director(Principal
      Executive Officer)Date:  August
      17, 2009By:
                /s/ Louis Ploth, Jr.Louis
      Ploth, Jr.Chief
      Financial Officer, Director and Secretary(Principal
      Financial and Accounting
Officer)
  34