----

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| DELAWARE                                                            |                                                        | 41-1505029                                   |
|---------------------------------------------------------------------|-------------------------------------------------------------|----------------------------------------------|
| (State      or other jurisdiction of incorporation or organization) |                                                        | (I.R.S.      Employer Identification Number) |
|                                                                |                                                        |                                         |
| 29      Emmons Drive, Suite C-10Princeton,      NJ                  |                                                        | 08540                                        |
| (Address      of principal executive offices)                       |                                                        | (Zip      Code)                              |
|                                                                | (609)      538-8200                                         |                                         |
|                                                                | (Issuer’s      telephone number, including area code) |                                         |

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

----

Table 

| Item         | Description                                                                                       | Page   |
|--------------|---------------------------------------------------------------------------------------------------|--------|
|         |                                                                                              |   |
| Part      I  | FINANCIAL      INFORMATION                                                                        |   |
| 1.           | Consolidated Financial Statements.                                                                | 3      |
| 2.           | Management’s Discussion and Analysis of Financial Condition      and Results of Operations. | 14     |
| 3.           | Quantitative and Qualitative Disclosure About Market      Risk.                                   | 22     |
| 4.           | Controls and Procedures.                                                                          | 22     |
|         |                                                                                              |   |
| Part      II | OTHER      INFORMATION                                                                            |   |
| 2.           | Unregistered Sales of Equity Securities and Use of      Proceeds.                                 | 23     |
| 5.           | Exhibits.                                                                                         | 23     |
|         |                                                                                              |   |

----

ITEM 1 -

FINANCIAL 

|                                                                                                                                                                                            |   |   | March      31, 2009(Unaudited) |    |   |   |   |   | December      31, 2008  |    |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------------------------------|---------|--------|--------|--------|--------|------------------------------|---------|
| AssetsCurrent      assets:                                                                                                                                                                      |   |   |                           |    |   |   |   |   |                         |    |
|         Cash      and cash equivalents                                                                                                                  |   | $      | 6,513,368                      |    |   |   |   | $      | 1,475,466                    |    |
|         Grants      receivable                                                                                                                          |   |   | 149,128                        |    |   |   |   |   | 278,316                      |    |
|              Inventory, net                                                                                                                                  |   |   |  79,370                   |    |   |   |   |   | 82,182                       |    |
|         Prepaid      expenses                                                                                                                           |   |   | 76,072                         |    |   |   |   |   | 86,837                       |    |
| Total      current assets                                                                                                                                                                       |   |   | 6,817,938                      |    |   |   |   |   | 1,922,801                    |    |
|                                                                                                                                                                                            |   |   |                           |    |   |   |   |   |                         |    |
| Office      and laboratory equipment, net                                                                                                                                                       |   |   | 23,175                         |    |   |   |   |   | 21,217                       |    |
| Intangible      assets, net                                                                                                                                                                     |   |   | 1,427,517                      |    |   |   |   |   | 1,418,717                    |    |
| Total      assets                                                                                                                                                                               |   | $      | 8,268,630                      |    |   |   |   | $      | 3,362,735                    |    |
|                                                                                                                                                                                            |   |   |                           |    |   |   |   |   |                         |    |
| Liabilities and shareholders’      equity                                                                                                                                                 |   |   |                           |    |   |   |   |   |                         |    |
| Current      liabilities:                                                                                                                                                                       |   |   |                           |    |   |   |   |   |                         |    |
|         Accounts      payable                                                                                                                           |   | $      | 1,038,013                      |    |   |   |   | $      | 1,015,005                    |    |
|         Accrued      compensation                                                                                                                       |   |   | 167,327                        |    |   |   |   |   | 370,614                      |    |
| Total      current liabilities                                                                                                                                                                  |   |   | 1,205,340                      |    |   |   |   |   | 1,385,619                    |    |
|                                                                                                                                                                                            |   |   |                           |    |   |   |   |   |                         |    |
| Commitments      and contingencies                                                                                                                                                              |   |   |                           |    |   |   |   |   |                         |    |
|                                                                                                                                                                                            |   |   |                           |    |   |   |   |   |                         |    |
| Shareholders’      equity:                                                                                                                                                                |   |   |                           |    |   |   |   |   |                         |    |
|         Common      stock, $.001 par value. Authorized 250,000,000 shares; 167,070,944 and      118,610,704 shares, respectively issued and outstanding |   |   | 167,071                        |    |   |   |   |   |  118,610                |    |
|         Additional      paid-in capital                                                                                                                 |   |   | 111,359,061                    |    |   |   |   |   |  104,176,253            |    |
|         Accumulated      deficit                                                                                                                        |   |   | (      104,462,842             |  ) |   |   |   |   | (      102,317,747           | )  |
| Total      shareholders’ equity                                                                                                                                                           |   |   | 7,063,290                      |    |   |   |   |   | 1,977,116                    |    |
|                                                                                                                                                                                            |   |   |                           |    |   |   |   |   |                         |    |
| Total      liabilities and shareholders’ equity                                                                                                                                           |   | $      | 8,268,630                      |    |   |   |   | $      |  3,362,735              |    |
|                                                                                                                                                                                            |   |   |                           |    |   |   |   |   |                         |    |

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DOR 

|                                                                               |   |    | 2009         |   |    | 2008             |          |
|------------------------------------------------------------------------------------|--------|---------|------------------------------------------------------|--------|---------|------------------|--------------------|
|                                                                               |   |    |                                                 |   |    |             |               |
| Revenues,      primarily from grants                                               |   | $       | 530,317                                              |   | $  | 677,640          |               |
| Cost      of revenues                                                              |   |    | (      417,309                                       | )      |    | (      529,179   | )                  |
|            Gross profit                                   |   |    | 113,008                                              |   |    | 148,461          |               |
|                                                                               |   |    |                                                 |   |    |             |               |
| Operating      expenses:                                                           |   |    |                                                 |   |    |             |               |
|        Research and development                                               |   |    | 1,590,999                                            |   |    | 600,001          |               |
|        General and administrative                                             |   |    |  532,137                                        |   |    |  848,111    |               |
|        Stock based compensation-research and development                 |   |    |  73,390                                         |   |    |  39,583     |               |
|        Stock based compensation-general and administrative               |   |    |  72,450                                         |   |    |  36,793     |               |
|            Total operating expenses                       |   |    | 2,268,976                                            |   |    | 1,524,488        |               |
|                                                                               |   |    |                                                 |   |    |             |               |
| Loss      from operations                                                          |   |    | (      2,155,968                                     | )      |    | (      1,376,027 | )                  |
|                                                                               |   |    |                                                 |   |    |             |               |
| Other      income:                                                                 |   |    |                                                 |   |    |             |               |
|        Interest income, net                                                   |   |    |  10,872                                         |   |    | 19,856           |               |
|                                                                               |   |    |                                                 |   |    |             |               |
| Net      loss                                                                      |   |  $ | (      2,145,096                                     | )      |  $ | (      1,356,171 | )                  |
|                                                                               |   |    |                                                 |   |    |             |               |
| BasicnBasic      and diluted net loss per share                               |   | $       | (      0.01                                          | )      | $       | (      0.01      | )                  |
|                                                                               |   |    |                                                 |   |    |             |               |
| Basic  Basic      and diluted weighted average common shares outstanding |   |    | 148,911,114                                          |   |    | 97,761,457       |               |

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DOR 

|                                                                  |   | Common      Stock | Additional      Paid-In capital | Accumulated      Deficit |
|-----------------------------------------------------------------------|--------|-------------------|---------------------------------|--------------------------|
|                                                                  |   |              | Shares                          |                     |   | Par      Value |   |   |   |   |   |   |   |
|                                                                  |   |              |                            |                     |   |   |   |   |   |   |   |   |   |
| Balance,January      1, 2009                                          |   |              | 118,610,7044                    |                     |   | $118,610 |   |   | $104,176,253 |   |   | (      $102,317,746 | ) |
|                                                                  |   |              |                            |                     |   |   |   |   |   |   |   |   |   |
| Issuance      of common stock from private placement, net of $144,000 |   |              | 20,914,035                      |                     |   | 20,915 |   |   | 2,219,287 |   |   | - |   |
|                                                                  |   |              |                            |                     |   |   |   |   |   |   |   |   |   |
| Issuance      of common stock for collaboration and supply agreement  |   |              | 25,000,000                      |                     |   | 25,000 |   |   | 4,425,000 |   |   | - |   |
|                                                                  |   |              |                            |                     |   |   |   |   |   |   |   |   |   |
| Issuance      of common stock for equity line                         |   |              | 46,205                          |                     |   | 46 |   |   | 4,954 |   |   | - |   |
|                                                                  |   |              |                            |                     |   |   |   |   |   |   |   |   |   |
| Issuance      of common stock to vendors                              |   |              | 2,500,000                       |                     |   | 2,500 |   |   | 297,500 |   |   | - |   |
|                                                                  |   |              |                            |                     |   |   |   |   |   |   |   |   |   |
| Issuance      of common stock warrants to vendors                     |   |              | -                               |                     |   | - |   |   | 90,227 |   |   | - |   |
|                                                                  |   |              |                            |                     |   |   |   |   |   |   |   |   |   |
| Stock      option expense                                             |   |              | -                               |                     |   | - |   |   | 145,840 |   |   | - |   |
|                                                                  |   |              |                            |                     |   |   |   |   |   |   |   |   |   |
| Net      loss                                                         |   |              | -                               |                     |   | - |   |   | - |   |   | (      2,145,096 | ) |
|                                                                  |   |              |                            |                     |   |   |   |   |   |   |   |   |   |
| Balance,March      31, 2009                                           |   |              | 167,070,944                     |                     |   | $167,071 |   |   | $111,359,061 |   |   | (      $104,462,842 | ) |
|                                                                  |   |              |                            |                     |   |   |   |   |   |   |   |   |   |

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DOR 

|                                                                                  |   | 2009                      |             | 2008    |    |
|---------------------------------------------------------------------------------------|--------|---------------------------|------------------|---------|---------|
| Operating      activities                                                             |   |                      |             |    |    |   |   |
|         Net loss                                                            |   |        $             | (      2,145,096 | )       |  $ | (      1,356,171 | ) |
|                                                                                  |   |                      |             |    |    |   |   |
| Adjustments      to reconcile net loss to net cash used by operating      activities: |   |                      |             |    |    |   |   |
|          Amortization and depreciation                                 |   |                      | 39,934           |    |    | 34,084 |   |
|          Non-cash stock compensation                                   |   |                      | 490,227          |    |    | 309,938 |   |
|          Stock option compensation                                     |   |                      | 145,840          |    |    | 76,376 |   |
|                                                                                  |   |                      |             |    |    |   |   |
| Change      in operating assets and liabilities:                                      |   |                      |             |    |    |   |   |
|          Grants receivable                                             |   |                      | 129,188          |    |    | 32,222 |   |
|          Inventory                                                     |   |                      |  2,812      |    |    | 40,047 |   |
|          Prepaid expenses                                              |   |                      |  10,765     |    |    | 137,456 |   |
|          Accounts payable                                              |   |                      | (      76,992    | )  |    | - |   |
|          Accrued compensation                                          |   |                      | (      203,286   | )  |    | (      228,688 | )  |
| Total      adjustments                                                                |   |                      | 538,488          |    |    | 401,435 |   |
|                                                                                  |   |                      |             |    |    |   |   |
|          Net cash used by operating activities                         |   |                      | (      1,606,608 | )       |    | (      954,736 | ) |
|                                                                                  |   |                      |             |    |    |   |   |
| Investing      activities:                                                            |   |                      |             |    |    |   |   |
|  Acquisition      of intangible assets                                           |   |                      | (      46,622    | )       |    | (      41,481 | ) |
|  Proceeds      from sale of equipment                                            |   |                      | -                |    |    | 500 |   |
|  Purchases      of office and laboratory equipment                               |   |                      | (      4,069     | )       |    | (      2,151 | ) |
|          Net cash used by investing activities                         |   |                      | (      50,691    | )       |    | (      43,132 | ) |
|                                                                                  |   |                      |             |    |    |   |   |
| Financing      activities:                                                            |   |                      |             |    |    |   |   |
|  Net      proceeds from sale of common stock                                |   |                      | 6,690,200        |    |    | 658,600 |   |
|  Proceeds      from sale of common stock pursuant to equity line                 |   |                      | 5,001            |    |    | - |   |
|          Net cash provided by financing activities                     |   |                      | 6,695,201        |    |    | 658,600 |   |
|                                                                                  |   |                      |             |    |    |   |   |
| Net      increase (decrease) in cash and cash equivalents                             |   |                      | 5,037,902        |    |    | (      339,268 | ) |
|          Cash and cash equivalents at beginning of period              |   |                      | 1,475,466        |    |    | 2,220,128 |   |
|          Cash and cash equivalents at end of period                    |   |          $ | 6,513,368        |    |  $ | 1,880,860 |   |
|                                                                                  |   |                      |             |    |    |   |   |
| Non-cash      transactions:                                                      |   |                      |             |    |    |   |   |
|          Non-cash stock payment to an institutional investor      |   | $                         | -           |    |  $ | 270,000  |   |
|                                                                                  |   |                      |             |    |    |   |   |

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DOR 

|    | The      Company is exploring out-licensing opportunities for orBec®      and oral BDP in territories outside North America, and for LPMTM-Leuprolide      and BioDefense programs in the United States and in Europe. The Company entered into a collaboration and      supply agreement with Sigma-Tau for the commercialization of      orBec®. Pursuant to this agreement, Sigma-Tau has an      exclusive license to commercialize orBec®      in the U.S., Canada and Mexico (the      Territory). Sigma-Tau is obligated to make payments upon the attainment of      significant milestones, as set forth in the agreement. The first      milestone payment, a $1 million payment, will be made upon the enrollment      of the first patient in the Company’s confirmatory Phase 3 clinical      trial of orBec®      for the treatment of acute GI GVHD, which is expected to occur in the      second half of 2009. Total milestone      payments due from Sigma-Tau for orBec®      under the agreement could reach up to      $10 million. Sigma-Tau will pay the Company a 35% royalty      (inclusive of drug supply) on net sales in the Territory,      as well as pay for commercialization expense, including launch      activities.  In connection with the      execution of the collaboration and supply agreement, the Company entered      into a common stock purchase agreement with Sigma-Tau pursuant to which      the Company sold 25 million shares of common stock to Sigma-Tau for $0.18      per share, for an aggregate price of $4,500,000. The purchase price was      equal to one hundred fifty percent (150%) of the average trading price of      the Company’s common stock over the five trading days prior to February      11, 2009. As part of the transaction, the Company granted Sigma-Tau      certain demand and piggy-back registration rights. The      Company has and will utilize Named Patient Access Programs wherever      possible in countries outside the United States to generate revenues from      orBec®. The      Company intends to utilize its existing $8 million equity line of credit      with Fusion Capital (approximately $7.8 million of which is still      available to the Company through June 2010) if and when it deems market      conditions to be appropriate. The      Company expects to receive new government grants intended to support      existing and new research and development over the next twelve months. In      addition to research and development funding, these grants would provide      additional support for its overhead expenditures as well as defray certain      costs intended to cover portions of its upcoming confirmatory Phase 3      trial of its lead product orBec® in      acute GI GVHD.  These grants would therefore have the effect of      extending its cash resources. The Company routinely files for government      grants which support its biotherapeutic and biodefense programs. There is      no assurance these programs will continue to be available or that the      Company will be successful in receiving grant awards. The      Company may obtain additional funds through the issuance of equity or      equity-linked securities through private placements or rights      offerings.  |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                       | Quarter      Ended  |   | Quarter      Ended  |
|----------------------------|---------------------|--------|---------------------|
|                       | March      31, 2009 |   | March      31, 2008 |
|                       | Loss                | Shares | EPS                 |   | Loss | Shares | EPS |
|                       |                |   |                |   |   |   |   |
| Basic      and Diluted EPS | ($2.14)             | 148.91 | ($0.01)             |   | ($1.36) | 97.76 | ($0.01) |

table of contents

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|                         | Weighted      Average Amortization period      (years) |   |   Cost            |   |  AccumulatedAmortization |   |   Net Book Value |
|------------------------------|--------------------------------------------------------|--------|-----------------------------|--------|-------------------------------|--------|----------------------------|
| March      31, 2009          |                                                   |   |                        |   |                          |   |                       |
| Licenses                     | 11.5                                                   | $      |    462,234   | $      |    149,710     | $      |    312,524  |
| Patents                      | 8.8                                                    |   |    1,917,225 |   |    802,231     |   |   1,114,993      |
| Total                        | 9.3                                                    | $      | 2,379,459                   | $      | 951,941                       | $      | 1,427,517                  |
|  December      31, 2008 |                                                   |   |                        |   |                          |   |                       |
| Licenses                     | 11.7                                                   | $      |    462,234   | $      |    142,994     | $      |    319,240  |
| Patents                      | 9.0                                                    |   |    1,870,603 |   |    771,126     |   |   1,099,477      |
| Total                        | 9.5                                                    | $      | 2,332,837                   | $      | 914,120                       | $      | 1,418,717                  |

|   | Amortization Amount                   |
|--------|---------------------------------------|
| 2010   | $   160,000            |
| 2011   |      165,000 |
| 2012   |      170,000 |
| 2013   |      175,000 |
| 2014   |      180,000 |

table of contents

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|                                                                |                                            March 31, 2009 |    |                                                                                                                                                     |    |              December 31,2008 |   |
|---------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------|---------|------------------------------------------------------------------------------------------------|--------|
| Deferred tax assets:                                                |                                                                                                                                                                                                                                               |    |                                                                                                                                                     |    |                                                                                           |   |
| Net      operating loss carry forwards                              | $      28,400,000                                                                                                                                                                                                                                  |    | $      26,300,000                                                                                                                                   |    |
| Orphan      drug and research and development credit carry forwards | 2,000,000                                                                                                                                                                                                                                          |    | 2,000,000                                                                                                                                                |    |
| Other                                                               | 3,300,000                                                                                                                                                                                                                                          |    | 3,300,000                                                                                                                                                |    |
| Total                                                               |   33,700,000                                                                                                                                                                                                                             |    |   31,600,000                                                                                                                                   |    |
| Valuation      allowance                                            | ( 33,700,000                                                                                                                                                                                                                                  |  ) | ( 31,600,000                                                                                                                                        |  ) |
| Net      deferred tax assets                                        |              $                         -                                                |    |        $                       - |    |

|                                                 |            2009                                               |              2008                             |
|------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------|
|                                                 |                                                                                                                 |                                                                                                           |
| Income      tax loss at federal statutory rate  |                        (34.00)% |                       (34.00)% |
| State      taxes, net of federal benefit        |               (6.50)                           |               (6.50)                     |
| Valuation      allowance                        |             40.50                                        |             40.50                                  |
| Provision      for income taxes (benefit)       |               -      %                         |                -      %             |

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| Year  | Research      and Development | Property      and Other Leases | Public      and Investor Relations | Total            |
|-------|-------------------------------|--------------------------------|------------------------------------|------------------|
| 2009  | $      2,300,000              | $      74,000                  | $      43,000                      | $      2,417,000 |
| 2010  | 2,900,000                     | 95,000                         | -                                  | 2,995,000        |
| 2011  | 200,000                       | 96,000                         | -                                  | 296,000          |
| 2012  | 200,000                       | 105,000                        | -                                  | 305,000          |
| 2013  | 200,000                       | 115,000                        | -                                  | 315,000          |
| Total | $ 5,800,000                   | $ 485,000                      | $ 43,000                           | $6,328,000       |

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|                                       |   | March      31, |             |
|--------------------------------------------|--------|----------------|------------------|
|                                       |   | 2009           |             | 2008 |   |
| Net      Revenues                          |   |           |             |   |   |   |   |
| BioDefense                                 |   | $              | 514,317          |   | $ | 677,640 |   |
| BioTherapeutics                            |   |           | 16,000           |   |   |   |   |
|        Total                          |   | $              | 530,317          |   | $ | 677,640 |   |
|                                       |   |           |             |   |   |   |   |
| Loss      from Operations                  |   |           |             |   |   |   |   |
| BioDefense                                 |   | $              | ( 65,938    | ) | $ | ( 96,390 | ) |
| BioTherapeutics                            |   |           | (      1,537,772 | ) |   | (      406,763 | ) |
| Corporate                                  |   |           | (      552,258   | ) |   | (      872,874 | ) |
|        Total                          |   | $              | (      2,155,968 | ) | $ | (      1,376,027 | ) |
|                                       |   |           |             |   |   |   |   |
| Identifiable      Assets                   |   |           |             |   |   |   |   |
| BioDefense                                 |   | $              | 947,666          |   | $ | 864,161 |   |
| BioTherapeutics                            |   |           | 658,979          |   |   | 562,551 |   |
| Corporate                                  |   |           | 6,661,985        |   |   | 1,955,178 |   |
|        Total                          |   | $              | 8,268,630        |   | $ | 3,381,890 |   |
|                                       |   |           |             |   |   |   |   |
| Amortization      and Depreciation Expense |   |           |             |   |   |   |   |
| BioDefense                                 |   | $              | 22,040           |   | $ | 19,635 |   |
| BioTherapeutics                            |   |           | 16,838           |   |   | 12,997 |   |
| Corporate                                  |   |           | 1,056            |   |   | 1,452 |   |
|        Total                          |   | $              | 39,934           |   | $ | 34,084 |   |
|                                       |   |           |             |   |   |   |   |
| Interest      Income                  |   |           |             |   |   |   |   |
| Corporate                             |   |  $        | 11,190      |   |  $ | 20,036  |   |
|         Total                    |   |  $        | 11,190      |   |  $ | 20,036  |   |
|                                       |   |           |             |   |   |   |   |
| Stock      Option Compensation             |   |           |             |   |   |   |   |
| BioDefense                                 |   |  $        | 26,531      |   |  $ | 19,517  |   |
| BioTherapeutic                        |   |           | 46,859      |   |   | 20,066  |   |
| Corporate                             |   |           | 72,450      |   |   | 36,793  |   |
|         Total               |   |  $        | 145,840          |   |  $ | 76,376  |   |
|                                       |   |           |             |   |   |   |   |

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ITEM 2 –

| (a) | initiate      and execute the pivotal Phase 3 confirmatory clinical trial for orBec® in      the treatment of acuteGI GVHD; |
|-----|---------------------------------------------------------------------------------------------------------------------------------------|

| (b) | identify      a development and marketing partner for orBec®      for territories outside of North America, as we have granted an exclusive      license to Sigma-Tau to commercialize orBec® in      the U.S., Canada and Mexico; Sigma-Tau will pay us a 35% royalty      (inclusive of drug supply) on net sales in these territories as well      as pay for commercialization expenses, including launch      activities; |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c) | conduct      and complete a Phase 2 clinical trial of orBec®      for the prevention of acute GVHD; |
|-----|----------------------------------------------------------------------------------------------------------|

| (d) | evaluate      and initiate additional clinical trials to explore the effectiveness of      oral BDP in other therapeutic indications involving inflammatory      conditions of the gastrointestinal (“GI”) tract such as radiation      enteritis, radiation injury and Crohn’sdisease; |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e) | make      orBec®  available      worldwide through NPAP for the treatment of acute GI  GVHD; |
|-----|-------------------------------------------------------------------------------------------------------------|

| (f) | reinitiate      development of our other biotherapeutics products, namely LPMTM      Leuprolide; |
|-----|--------------------------------------------------------------------------------------------------|

| (g)  | continue      to secure additional government funding for each of our biodefense      programs, RiVaxTM      and BT-VACCTM,      through grants, contracts andprocurements; |
|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (h) | convert      our biodefense vaccine programs from early stage development to advanced      development and manufacturing with the potential to collaborate and/or      partner with other companies in the biodefense  area; |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i) | acquire      or in-license new clinical-stage compounds for development;      and |
|-----|-----------------------------------------------------------------------------------|

| (j) | explore      other business development and acquisition strategies under which we may      be considered to be an attractive acquisition candidate by another      company. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                              | Phase      3 trial      | Phase      2 trial           |
|---------------------------------------------------|------------------------------|------------------------------|
|                                              | orBec®                  | Placebo                      | orBec® | Placebo |
|  Number      of patients randomized          |  62                     |  67                     |  31 |  29 |
|  Number      (%) who died                    |  5      (8%)            |  16      (24%)          |  3      (10%) |  6      (21%) |
|  Hazard      ratio (95% confidence interval) |  0.33      (0.12, 0.89) |  0.47      (0.12, 1.87) |
|  Death      with infection*                  |  3      (5%)            |  9      (13%)           |  2      (6%) |  5      (17%) |
|  Death      with relapse*                    |  3      (5%)            |  9      (13%)           |  1      (3%) |  4      (14%) |

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|    | We      are exploring out-licensing opportunities for orBec®      and oral BDP in territories outside North America, and for LPMTM      -Leuprolide and BioDefense programs in the U.S. and inEurope. We entered into a collaboration and supply      agreement with Sigma-Tau for the commercialization of orBec®. Pursuant to this agreement, Sigma-Tau has an      exclusive license to commercialize orBec®      in the U.S., Canada and Mexico (the      Territory). Sigma-Tau is obligated to make payments upon the attainment of      significant milestones, as set forth in the agreement. The first      milestone payment, a $1 million payment, will be made upon the enrollment      of the first patient in our confirmatory Phase 3 clinical trial of      orBec®      for the treatment of acute GI GVHD, which is expected to occur in the      second half of 2009. Total milestone      payments due from Sigma-Tau for orBec®      under the agreement could reach up to      $10 million. Sigma-Tau will pay us 35% royalty (inclusive of      drug supply) on net sales in the Territory, as well as pay      for commercialization expense, including launch activities. In connection with the execution of the      collaboration and supply agreement, we entered into a common stock      purchase agreement with Sigma-Tau pursuant to which we sold 25 million      shares of common stock to Sigma-Tau for $0.18 per share, for an aggregate      price of $4,500,000. The purchase price was equal to one hundred fifty      percent (150%) of the average trading price of our common stock over the      five trading days prior to February 11, 2009. As part of the transaction,      we granted Sigma-Tau certain demand and piggy-back registration      rights. We      have and will utilize NPAPs wherever possible in countries outside the      U.S. to generate revenues from orBec®.  |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    | We      intend to utilize our existing $8 million equity line of credit with      Fusion Capital (approximately $7.8 million of which is still available to      us through June 2010) if and when we deem market conditions to be      appropriate. We      expect to receive new government grants intended to support existing and      new research and development over the next twelve months. In addition to      research and development funding, these grants would provide additional      support for our overhead expenditures as well as defray certain costs      intended to cover portions of our upcoming confirmatory Phase 3 trial of      our lead product orBec® in      acute GI GVHD. These grants would therefore have the effect of extending      our cash resources. We routinely file for government grants which support      our biotherapeutic and biodefense programs. There is no assurance these      programs will continue to be available or that we will be successful in      receiving grant awards. We      may obtain additional funds through the issuance of equity or      equity-linked securities through private placements or rights      offerings.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

|                                                |                       2009 |                    2008 |
|-----------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------|
| Program      - Research & Development Expenses  |                                                                                                                                     |                                                                                                                   |
| orBec®                                         | $ 1,309,732                                                                                                                         | $ 351,675                                                                                                         |
| RiVax™                                        | 224,500                                                                                                                                  | 120,287                                                                                                                |
| BT-VACC™                                      | 52,690                                                                                                                                   | 60,261                                                                                                                 |
| Oraprine™                                     | 1,500                                                                                                                                    | 3,000                                                                                                                  |
| LPMTM-Leuprolide                                    | 2,577                                                                                                                                    | 64,778                                                                                                                 |
|   Research      & Development Expense | $ 1,590,999                                                                                                                         | $ 600,001                                                                                                         |
|                                                |                                                                                                                                     |                                                                                                                   |
| Program      - Reimbursed under Grants              |                                                                                                                                     |                                                                                                                   |
| orBec®                                         | $ 19,784                                                                                                                            | $  -                                                                                                         |
| RiVax™                                        | 397,525                                                                                                                                  | 515,190                                                                                                                |
| BT-VACC™                                      | -                                                                                                                                        | 13,989                                                                                                                 |
|   Reimbursed      under Grant             | $ 417,309                                                                                                                           | $ 529,179                                                                                                         |
|                                                |                                                                                                                                     |                                                                                                                   |
| TOTAL                                               | $ 2,008,308                                                                                                                         | $ 1,129,180                                                                                                       |

| Contractual      Obligation           | Year2009      | Year2010      | Year2011      |
|---------------------------------------|---------------|---------------|---------------|
| Non-cancelable      obligation (1)(2) | $ 74,000 | $ 95,000 | $      96,000 |
| TOTALS                                | $      74,000 | $      95,000 | $ 96,000 |

| (1)   | On      April 1, 2009, we entered into a sub-lease agreement thru March 31, 2012      to occupy office space in Princeton, New Jersey. We are required to      provide 4 months of rent as a security deposit, the rent for the first 18      months will be approximately $7,500 per month, or $17.00 per square foot.      This increases to approximately $7,650 per month of rent, or $17.50 per      square foot for the remaining 18months. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | On      April 24, 2008, we signed a three year lease for a  copier. |
|-----------------|---------------------------------------------------------------------|

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| 31.1 | Certification      of Chief Executive Officer pursuant to Exchange Act rule 13(a)-14(a)      (under Section 302 of the Sarbanes-Oxley Act of 2002).  |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| 31.2 | Certification      of Principal Financial Officer pursuant to Exchange Act rule      13(a)-14(a) (under Section 302 of the Sarbanes-Oxley Act of      2002).  |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 32.1       | Certification      of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley      Act of 2002.      |
|------------|-------------------------------------------------------------------------------------------------------------------------|
| 32.2  | Certification      of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley      Act of 2002.  |

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| May      14, 2009 |   | by      /s/ Christopher J.      SchaberChristopher      J. Schaber, Ph.D.President      and Chief Executive Officer(Principal      Executive Officer) |
|-------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|
|              |   |                                                                                                                                                  |
| May      14, 2009 |   | by      /s/ Evan MyrianthopoulosEvan      MyrianthopoulosChief      Financial Officer(Principal      Financial and Accounting Officer)           |

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| 31.1 | Certification      of Chief Executive Officer pursuant to Exchange Act rule 13(a)-14(a)      (under Section 302 of the Sarbanes-Oxley Act of 2002).  |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| 31.2 | Certification      of Principal Financial Officer pursuant to Exchange Act rule      13(a)-14(a) (under Section 302 of the Sarbanes-Oxley Act of      2002).  |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 32.1       | Certification      of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley      Act of 2002.      |
|------------|-------------------------------------------------------------------------------------------------------------------------|
| 32.2  | Certification      of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley      Act of 2002.  |

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