**UNITEDSTATES**

**SECURITIESAND EXCHANGE COMMISSION**

 

**Washington,D.C. 20549**

 

**FORM 10-K/A**

 
| **(Mark  One)** |   |   |
|-----------------|--------|--------|

 
| **x** | ** ** | **ANNUAL  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE  ACT OF 1934** |
|-------|------------|------------------------------------------------------------------------------------------------------|

 
| **For the  fiscal year ended December 31,  2007** |
|--------------------------------------------------------|

 
| **or** |
|--------|

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

 

**For thetransition period from             to             **

 

**Commissionfile number:  001-15070**

 

**RegeneRxBiopharmaceuticals, Inc.**

(Exact name ofregistrant as specified in its charter)

 

| **Delaware**                                               | ** ** | **52-1253406**       |
|------------------------------------------------------------|------------|----------------------|
| State or other  jurisdiction of                            |       | (I.R.S. Employer     |
| incorporation or  organization                             |       | Identification  No.) |
|                                                       |       |                 |
| **3  Bethesda Metro Center, Suite 630, Bethesda, MD** | ** ** | **20814**            |
| (Address of  principal executive offices)                  |       | (Zip Code)           |

 

Registrant’stelephone number, including area code**: 301-280-1992**

 

Securities registeredpursuant to Section 12(b) of the Act:

 

| **Title of each class** | ** ** | **Name of each exchange on which registered** |
|----------------------------------------|------------|-----------------------------------------------------------------------------|
| Common Stock  $0.001 par value         |       | American Stock  Exchange                                                    |

 

Securitiesregistered pursuant to section 12(g) of the Act: **None.**

 

Indicate by check mark ifthe registrant is a well-known seasoned issuer, as defined in Rule 405 ofthe Securities Act. o Yes  x No

 

Indicate by check mark ifthe registrant is not required to file reports pursuant to Section 13 or Section 15(d) ofthe Act. o Yes  x No

 

**Note**— Checking the box above will not relieve any registrant required to filereports pursuant to Section 13 or 15(d) of the Securities ExchangeAct of 1934 from their obligations under those Sections.

 

Indicate by check markwhether the registrant (1) has filed all reports required to be filed by Section 13or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12months (or for such shorter period that the registrant was required to filesuch reports), and (2) has been subject to such filing requirements forthe past 90 days.    x  Yes   o  No

 

Indicate by check mark ifdisclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, tothe best of registrant’ s knowledge, in definitive proxy or informationstatements incorporated by reference in Part III of this Form 10-K orany amendment to this Form 10- K                                   o

 

Indicate by check markwhether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer or a smaller reporting company. See definitions of “acceleratedfiler,” “large accelerated filer” and “smaller reporting company” in Rule 12b-2of the Securities Exchange Act of 1934. (Check one):

 

| Large  accelerated filer  o               |   | Accelerated  filer o         |
|------------------------------------------------|--------|-----------------------------------|
| Non-accelerated  filer o                  |   | Smaller  reporting company x |
| (Do not check if  a smaller reporting company) |   |                              |

 

Indicate by check markwhether the registrant is a shell company (as defined in Rule 12b-2 of theAct). oYes x No

 

As of June 30, 2007,the aggregate market value of the voting stock held by non-affiliates of theregistrant was approximately $49.8 million. Such aggregate market value wascomputed by reference to the closing price of the Common Stock as reported onthe American Stock Exchange on June 30, 2007.

 

The number of sharesoutstanding of the registrant’s common stock, as of March 17, 2008 was51,553,527.

 

DOCUMENTSINCORPORATED BY REFERENCE

 

**None.**

 

 

----

 

**REGENERXBIOPHARMACEUTICALS, INC.**

 

**ExplanatoryNote**

 

This Amendment No. 1(this “Amendment”) to the Company’s Annual Report on Form 10-K for theyear ended December 31, 2007, initially filed with the Securities ExchangeCommission (the SEC”) on March 28, 2008 (the Original Filing”), amends andrestates Item 1. Business of the Original Filing to correct a typographicalerror concerning the target date for the completion of enrollment of theCompany’s Phase II trial involving RGN-137 for the treatment of epidermolysisbullosa.  As reflected in this Amendment,the Company expects patient accrual to be completed later in the fourth quarterof 2008 or the first quarter of 2009, with the reporting of data as soon aspracticable thereafter.  The Company hasalso clarified that it expects to complete patient accrual for the Company’sPhase II trial involving RGN-137 for the treatment of venous stasis ulcers inthe second quarter of 2008.  See “Business—Primary Commercial Development Focus—ThymosinBeta 4—Clinical Development” on page      for thecomplete text of these revisions.

 

Except as describedabove, the Original Filing has not been amended, updated or otherwise modified.

 

2

----

 

**PART I**

 

*ThisAnnual Report on Form 10-K, including the section entitled “Management’sDiscussion and Analysis of Financial Condition and Results of Operations,”contains forward-looking statements regarding us and our business, financialcondition, results of operations and prospects within the meaning of thePrivate Securities Litigation Reform Act of 1995. Forward-looking statementsmay be identified by the words “project,” “believe,” “anticipate,” “plan,” “expect,”“estimate,” “intend,” “should,” “would,” “could,” “will,” “may” or othersimilar expressions. In addition, any statements that refer to projections ofour future financial performance, our clinical development programs andschedules, our anticipated growth and trends in our business, the anticipatedapproval of shares under our additional listing application with Amex, and othercharacterizations of future events or circumstances are forward-lookingstatements. We cannot guarantee that we will achieve the plans, intentions orexpectations expressed or implied in our forward-looking statements. There are a number of important factors that could cause actual results, levelsof activity, performance or events to differ materially from those expressed orimplied in the forward-looking statements we make, including those describedunder “Risk Factors” set forth below. In addition, any forward-lookingstatements we make in this document speak only as of the date of this document,and we do not intend to update any such forward-looking statements to reflectevents or circumstances that occur after that date.*

 

**Item 1.Business.**

 

**General**

 

RegeneRxBiopharmaceuticals, Inc. (the “Company”, “we”, “us”, “our” or “RegeneRx”),is a biopharmaceutical company focused on the discovery and development ofnovel molecules to promote tissue and organ repair.  Currently, we haveformulated three drug products based on Thymosin beta 4 (“Tb4”), a 43 amino acid peptide.  Current research suggests that these drugproducts may prove efficacious for multiple medical indications whenadministered either topically or systemically.  Therefore, we aredeveloping several Tb4-based therapeuticdrug candidates:  RGN-137, a topically applied gel product forhard-to-heal chronic dermal wounds; RGN-259, a sterile, preservative-freetopical eye drop for ophthalmic wounds; and RGN-352, a parenteral (injectable)formulation for systemic delivery for treatment of patients with an acutemyocardial infarction (“AMI”), or heart attack.. We hold more than 60world-wide patents and patent applications related to dermal, ophthalmic, andother organ and tissue repair.  Under three Investigational New DrugApplications (“INDs”), cleared by the U.S. Food and Drug Administration (“FDA”),we are sponsoring, in parallel, three Phase II dermal wound healing clinicaltrials for RGN-137, a Phase II ophthalmic wound healing trial for RGN-259 and aPhase I clinical trial utilizing RGN-352 in support of our cardiovascularclinical program.  Under one of our INDs and with European regulatoryapproval, an affiliate of Sigma-Tau Finanziaria S.p.A., or Sigma-Tau, ourlargest stockholder and a leading international pharmaceutical company, isconducting one of the Phase II dermal wound healing clinical trials in venousstasis ulcers in Italy and Poland.  Sigma-Tau has assumed all associatedcosts.

 

We utilize an outsourcingbusiness strategy, as we believe this helps us to control costs while focusingon the clinical development of T b4-based product candidates.  We use this model for certain research anddevelopment programs, nonclinical pharmacology and toxicology studies, clinicaltrials, and manufacturing operations, as well as other administrative functionssuch as legal and accounting services.  In tandem with an experiencedmanagement staff, we believe this approach enhances our ability to allocateresources rapidly to different projects while reducing the need for expensiveinfrastructure.  The strategy utilizes vendors and contract manufacturersto supply clinical grade material and to formulate and manufacture each drugcandidate.  It also includes utilizing third-party

 

3

----

 

contract researchorganizations to perform pre-clinical studies and/or clinical trials inaccordance with our designed protocols.

 

**PrimaryCommercial Development Focus — Thymosin Beta 4**

 

*General.* Originally isolated from the thymus gland, Tb4is a chemically synthesized copy of a naturally-occurring 43-amino acid peptidethat is found in a majority of tissue types with the highest concentrations inblood platelets and white blood cells.  T b4 is also found extracellularly in blood plasma, wound fluid and tears. Itplays a vital role in cell structure and motility and in the protection,regeneration, remodeling and healing of tissues.  Although it isrecognized that wound healing is a complex process, most companies working todevelop new drugs in this area have focused primarily on adding differentgrowth factors to stimulate healing and have, to date, failed to demonstratedramatic improvements in the healing process.  Unlike those growthfactors, numerous studies, published by independent researchers, haveidentified several important biological activities involving T b4 that make it unique as a wound healing agent.

 

Tb4regulates actin, which comprises up to 10% of the protein of non-muscle cellsand plays a central role in cell structure (formation of the cytoskeleton) andin the movement of cells throughout the body.  Research studies from theNational Institutes of Health (“NIH”) established that T b4 stimulates the migration of human keratinocytes (skin cells) and the migrationof human endothelial cells.  Endothelial cells are the major cell typesresponsible for the formation of blood vessels, a process known asangiogenesis, and other tissues. These studies were the first to document theimportant role of T b 4 in woundhealing.

 

Tb4also reduces inflammation and stimulates the formation of collagen andup-regulates the expression of a subepithelial membrane protein,laminin-5.  Both substances are central to healthy tissues and preventionof disease.   In combination, these various mechanisms of action worktogether to play a vital role in the healing of injured or damaged tissues.

 

Tb4has also been shown to prevent apoptosis (programmed cell death) in both thecornea (eye) and myocardium (heart).  Further,*in vivo* preclinical studies have shown T b4 to be active both topically and systemically to accelerate wound healing inthe skin to be cardioprotective in the ischemic heart failure.   Incombination, these various mechanisms of action work together to play a vitalrole in the healing of injured or damaged tissues.

 

Based on the foregoingbiological activities, in addition to others, we believe Tb4to be an essential compound in the wound-healing process and as such will havemany potential medical applications.  T b4 therefore is the basis of our clinical programs from which we intend todevelop unique medical products and investigate its broad clinical potential.

 

*ProductDevelopment.*  With time, we have learned more about Tb4’stherapeutic potential and its underlying mechanisms of action, and haveexpanded our clinical development program beyond the chronic dermal wound indicationsinitially targeted. T b4’s role in healing dermal wounds in pre-clinical*in vivo* models was initially established by the National Institutesof Health (“NIH”).  These data led management to license T b4 from the NIH, a license discussed in more detail under*Proprietary Rights* below, and to launch aclinical development program that targeted promising indications, all of whichwere related to chronic dermal wounds.  Researchers at Wayne StateUniversity and the Kresge Eye Institute subsequently published pre-clinical*in-vivo* data that suggested T b 4 may havesignificant healing potential in the cornea.  These findings were followedby results

 

4

----

 

published in Nature,November 25, 2004, based on research conducted by the University of Texas— Southwestern Medical Center, that suggested T b4 may prevent damage of myocardium (heart tissue) immediately after an acutemyocardial infarction (“AMI”) in pre-clinical*in vivo* models.

 

These independentfoundational research efforts have guided our current clinical developmentprogram for chronic dermal wounds, ophthalmic injuries and AMIs.  Managementand our Board of Directors, or our Board, are focused on proving human efficacyof T b 4 in theseareas.  And, while we are not currently initiating additional clinicalprograms, we continually monitor all of the scientific research surrounding T b4 to confirm our clinical strategy and to evaluate additional indications wemight target at a future date.  For instance, a study published in*Nature*, November 15, 2006 by thecollective efforts of scientists from University College — London,Massachusetts General Hospital, and Baylor University identified T b4 as the triggering factor to stimulate adult epicardial progenitor or stemcells to mature into blood vessels and being responsible for normal fetal heartdevelopment and maintenance of a healthy adult heart.  Further, on November 5,2007, at an American Heart Association meeting in Orlando, Florida, researchersfrom the University of Munich, Vanderbilt University, and the University ofTexas - Southwestern Medical Center reported T b4’s cardio- protective effects in an ischemic-reperfusion model, thus, closelyreplicating the human procedure for unblocking arteries and then utilizing T b4 to protect the heart.  These results, as well as others, providesignificant evidence to suggest that T b4’s collective mechanisms of action and its anti-apoptotic properties inparticular, could provide therapeutic relief in other ischemic conditionselsewhere in the body.

 

*ClinicalDevelopment. *In December of 2002, following thesubmission of our first IND, the FDA allowed us to begin Phase I human dermalclinical trials with RGN-137.  The Phase I trial was successfullycompleted in September of 2003.  In November 2004, January 2005 and February 2005,we were cleared to initiate our first of three dermal Phase II wound healingclinical trials using our dermal product, RGN-137.  The first Phase IItrial assesses the safety and effectiveness of RGN-137 in the treatment ofpatients with chronic pressure ulcers, more commonly referred to as bedsores.  Based on the latest enrollment information, we believe fullpatient enrollment should be completed in the second quarter of 2008 and weexpect to report data in the third quarter of 2008.  The second trial isdesigned to assess safety and effectiveness of RGN-137 in the treatment ofpatients with venous stasis ulcers that result from poor blood circulation(venous insufficiency).  The venous stasis trial is being co-managed byRegeneRx and Sigma-Tau, is paid for in its entirety by Sigma-Tau, and is beingconducted pursuant to our U.S. IND. We also believe this trial should completeenrollment in the second quarter of 2008. The third Phase II trial targets the treatment of patients withepidermolysis bullosa (“EB”), a genetic defect manifested by the presence offragile skin and other tissues that can blister at the slightest trauma orfriction.  Of our three current Phase IItrials, EB has been designated as an “orphan” indication due to a prevalence inthe U.S. of less than 200,000 patients.  Additionally, RegeneRx was awardeda $545,000 grant from the Office of Orphan Drug Products at the FDA to supportthe EB clinical trial.  We expect patient accrual to be completed later inthe fourth quarter of 2008 or the first quarter of 2009, with the reporting ofdata as soon as practicable thereafter.  For additional informationregarding the regulatory approval process for our product candidates, see “GovernmentRegulation” below.

 

In 2005, based on thereported results of pre-clinical studies indicating Tb4’sability to accelerate corneal wound healing in the eye and its healing andprotective properties in the heart, we decided to expand our developmentprogram to include the following additional clinical indications.  We arecurrently enrolling diabetic patients who undergo corneal epithelialdebridement (removing the outer layer of the eye) during vitrectomy surgeryand, due to their diabetes, often heal slowly or incompletely.  The designof the study allows us to assess the safety and effectiveness of RGN-259 inthis patient population in a highly controlled manner. Therefore, we believethis to be an excellent

 

5

----

 

model with which tomeasure the efficacy and safety of our ophthalmic product candidate,RGN-259.  However, we do not view this model as a significant commercialindication, but rather a proof-of-concept trial, after which we will targetother ophthalmic indications with larger market potential.  We expect tocomplete enrollment in the fourth quarter of 2008 or the first quarter of 2009,with the reporting of data as soon as practicable thereafter.  It ispossible, however, that due to the declining number of debridement proceduresin general with this type of surgery, patient accrual could be slower than wehave targeted.

 

We have also conducted aseries of pre-clinical studies and are sponsoring a Phase I clinical trials inhealthy volunteers for parenteral administration of RGN-352 to support futureuse in Phase II clinical trials in patients with AMIs.  In 2006 we held apre-IND meeting with the FDA and subsequently filed an IND for this indicationat the end of the first quarter of 2007.  The FDA cleared us to initiate aPhase I clinical trial, beginning with Phase IA followed by Phase IB. Thisclinical trial is currently being initiated.  We expect the Phase IA tocomplete enrollment in the second quarter of calendar year 2008 and report datain the later part of the third quarter of 2008.

 

All of our efforts todevelop these applications will likely require substantial additional capitalto undertake or complete.  There can be no assurance that we will be ableto obtain capital in sufficient amounts, or on acceptable terms, or atall.  If we raise funds by selling additional shares of our common stockor securities convertible into our common stock, the ownership interest of ourexisting stockholders may be significantly diluted. In addition, if additionalfunds are raised through the issuance of preferred stock or debt securities,these securities are likely to have rights, preferences and privileges seniorto our common stock and may involve significant fees, interest expense,restrictive covenants and the granting of security interests in our assets. Ourfailure to successfully address ongoing liquidity requirements would have amaterial negative impact on our business, including:  the possibly ofsurrendering our rights to some technologies or product opportunities, delayingour clinical trials, or ceasing operations.  For additional informationregarding our financial resources, see “Liquidity and Capital Resources underItem 7. Management’s Discussion and Analysis of Financial Condition and Resultsof Operations” below.  For additional information regarding our efforts tocommercialize T b 4, see “ProprietaryRights” below.

 

*LicensingEfforts.*  We also are continuing to focus on finding oneor more third-party pharmaceutical companies to license our technology and tohelp us continue the development of our product candidates.  We believethat having such partners would enable us to both defray the costs associatedwith the development of our product candidates and accelerate the speed withwhich we may be able to complete development of and obtain regulatory approvalfor our product candidates and commercialize such products.  However, wecan offer no assurance that we will be able to enter into license anddevelopment agreements with third-party pharmaceutical companies or that anysuch relationships would in fact decrease our costs or accelerate our productdevelopment efforts.

 

**Manufacturing**

 

We use an outsidecontract manufacturer to produce bulk Tb4,i.e., the active pharmaceutical ingredient (“API”) via an established andproven manufacturing process known as solid-phase peptide synthesis.  Weare in the process of qualifying other manufacturers.  Currently, we donot have any long-term supply agreements in place.  Therefore, we intendto establish a long-term supply arrangement with at least one of thesemanufacturers in the near future, followed by a second manufacturer at theearliest practicable time.  No assurance can be given, however, that suchagreements will be negotiated on favorable terms, or at all.  Contractorsare selected on the basis of their supply capability, ability to produce a drugsubstance in accordance with current Good Manufacturing Practice (“GMP”)requirements of the FDA, and ability to meet our established specifications.

 

We also use outsidecontract manufacturers to formulate bulk Tb4into a final drug product.  We have finished the formulation anddevelopment work for RGN-137 used in our three Phase II chronic dermal woundtrials currently underway.  We have completed formulation of a sterile eyedrop, RGN-259, that we are using in our ophthalmic (“DV”) trial.  And, wehave completed the formulation development of RGN-352, a sterile, parenteral(injectable) solution we will use in our Phase I and AMI trials.  All ofthese formulations may require additional studies and undergo variousmodifications as we move through our clinical development programs.

 

6

----

 

**Competition**

 

We are engaged in abusiness that is highly competitive.  Research and development activitiesfor the development of new drugs to treat patients with our targetedindications are being sponsored or conducted by private and public institutionsand by major pharmaceutical companies located in the United States and a numberof foreign countries.  Most of these entities have financial and humanresources that are substantially greater than ours, and specifically withregard to the conduct of clinical research and development activities, clinicaltesting and in obtaining the regulatory approvals necessary to marketpharmaceutical products.

 

With respect to dermalwound healing, Johnson & Johnson has marketed RegranexTM for thispurpose in patients with diabetic foot ulcers.  Other companies, such asNovartis, are developing and marketing artificial skins, which could competewith our product candidates in dermal wound healing areas.  Moreover,dermal wound healing is a large and highly fragmented marketplace attractingmany companies, large and small, to develop therapeutic products and medicaldevices for treating acute and chronic dermal wounds including, for example,honey-based ointments and low frequency cavitational ultrasound.

 

There are numerouscompanies and institutions engaged in research, development and marketing ofproducts for ophthalmic wound healing and treatment of ophthalmic disorderswhere T b 4 may beuseful.  Most specialty ophthalmic companies have various products on themarket that could compete with T b 4 or be modifiedto compete with our product candidates.  Other companies marketantibiotics and steroids to treat certain conditions within our area of focus.

 

Currently, there are noapproved pharmaceutical products for preventing or repairing cardiac damageresulting from an AMI.  However, the market for a product of this type issignificant and many pharmaceutical companies and research organizations areexploring products and technologies that may prevent such damage or improvecardiac function after an AMI.  Furthermore, if we were to successfullydevelop RGN-352 for other cardiovascular indications, such as acute or chroniccongestive heart failure, such a product would have to compete with other drugscurrently marketed by large pharmaceutical companies for such indications.

 

**GovernmentRegulation**

 

In the United States, theFederal Food, Drug, and Cosmetic Act, as amended, and the regulationspromulgated thereunder, and other federal and state statutes and regulationsgovern, among other things, the testing, manufacturing, labeling, storing,recordkeeping, approving, advertising, and promoting of our productcandidates.  Regulation by governmental authorities in the United Statesand foreign countries will be a significant factor in the manufacturing andmarketing of our product candidates and in our ongoing research and productdevelopment activities.  Any product candidate we develop will requireregulatory approval by governmental agencies prior to commercialization. In particular, human therapeutic products are subject to rigorous pre-clinicalstudies and clinical trials and other approval procedures by the FDA andsimilar health authorities in foreign countries.  The process of obtainingthese approvals and subsequent compliance with appropriate federal and statestatutes and regulations require the expenditure of substantial resources.

 

Pre-clinical studies mustordinarily be conducted to evaluate the potential efficacy by pharmacologystudies and the safety of an investigational new drug by toxicologystudies.  The results of these studies, among other things are submittedto the FDA as part of an Investigational New Drug

 

7

----

 

Application, or IND,which must be reviewed and allowed to go into effect by the agency beforeclinical trials can begin.  Typically, clinical evaluation involves athree-stage process.  In Phase I clinical trials are typically conductedwith a small number of healthy volunteers to determine the safety profile,the pattern of drug distribution, metabolism and excretion, and to assess thedrugs affect on the subject.  In Phase II (therapeutic exploratory),trials are conducted with somewhat larger groups of patients, who are selectedby a relatively narrow criteria yielding a relatively homogenous populationthat are afflicted with the target disease, in order to determine preliminaryefficacy, optimal dosages and expanded evidence of safety. Phase II studiesshould allow for the determination of the dose to be used in Phase III. In Phase III (therapeutic confirmatory), large scale, multi-center, comparativetrials are conducted with patients afflicted with a target disease in order toprovide enough data for the statistical proof of safety and efficacy and safetyrequired by the FDA and other regulatory authorities. The primary objective ofPhase III clinical trials is to show that the drug confers therapeutic benefit.

 

The results of all of thesepre-clinical studies and clinical trials, along with detailed information onmanufacturing, are submitted to the FDA in the form of a New Drug Application,or NDA, for approval to commence commercial sales.  In responding to anNDA, the FDA may grant marketing approval, request additional information ordeny the application if the FDA determines that the application does notsatisfy its regulatory approval criteria.  Therefore, even if we completePhase III clinical trials for certain of our product candidates, and submit anNDA to the FDA, there can be no assurance that the FDA will grant marketingapprovals, or if granted, that they will be granted on a timely basis.  Ifthe FDA does approve a product candidate, it may require, among other things,post-marketing testing, including potentially expensive Phase IV studies(efficacy studies in the patient population after marketing), and surveillanceto monitor the safety and effectiveness of the drug.  In addition, the FDAmay in some circumstances impose restrictions on the use of the drug that maybe difficult and expensive to administer.  Product approvals may bewithdrawn if compliance with regulatory requirements is not maintained or ifproblems occur after the product reaches the market.

 

Among the conditions foran NDA approval, is the requirement that the applicable manufacturing,clinical, pharmacovigilance, quality control and manufacturing proceduresconform on an ongoing basis with current Good Clinical Practices, GoodLaboratory Practices, current Good Manufacturing Practices, and computerinformation system validation standards.  Before approval of an NDA, theFDA will perform a prelicensing inspection of clinical sites, manufacturingfacilities and the related quality control records to determine its compliancewith these requirements.  To assure compliance, applicants must continueto expend time, money and effort in the area of training, production andquality control.  After the applicant is licensed for the manufacture ofany product, manufacturers are subject to periodic inspections by theFDA.  If a company fails to comply with FDA regulatory requirements, FDAmay pursue a wide range of remedial actions.

 

In recent years, anincreasing number of legislative proposals have been introduced or proposed inCongress related to the regulation of drug products, and we cannot predict theoutcome or effect of such legislation on our business.

 

In June 2004, wereceived Orphan Drug designation from the FDA for Tb4for the treatment of Epidermolysis Bullosa, a rare genetic diseasecharacterized by the presence of extremely fragile skin and other tissues,resulting in recurrent blisters from minor mechanical friction or trauma. Under the Act, the FDA may designate a product or products as having Orphan Drugstatus to treat “a rare disease or condition” which is a disease or conditionthat affects populations of less than 200,000 individuals in the United States,or, if victims of a disease number more than 200,000, the sponsor establishesthat it does not realistically anticipate its product sales will be sufficientto recover its costs.  If a product candidate is designated as an OrphanDrug, then the sponsor is entitled to receive certain

 

8

----

 

incentives to undertake the development and marketing of the product,including grants for clinical trials.  In 2006, we received a two-yeargrant for $545,000 from the FDA’s office of OrphanProducts.     Another such incentive, once approved, ismarketing exclusivity for a period of seven years.  There may be multipledesignations of Orphan Drug status for a given drug and for differentindications.  The sponsor of the first approved NDA for a given drug forits use in treating a rare disease may receive marketing exclusivity for thatspecific use.  Orphan Drug designation does not guarantee that a productcandidate will be approved by the FDA for marketing for the designation, andeven if a sponsor of a product candidate for an indication for use with anOrphan Drug designation is the first to obtain FDA approval of an NDA for thatdesignation and obtains marketing exclusivity, another sponsor’s applicationfor the same drug product may be approved by the FDA during the period ofexclusivity if the FDA concludes that it is clinically superior.  In thisinstance, the orphan designation and marketing exclusivity originally grantedwould be lost in favor of the clinically superior product.

 

**ProprietaryRights**

 

We entered into aMaterial Transfer — Cooperative Research and Development Agreement with the NIHduring the second quarter of 1997.  Under this agreement, we received anoption to elect an exclusive or non-exclusive commercialization license fromthe NIH for any patent rights that might result from the NIH research studythat relate to the use of T b4 as a tissue growth and repair factor.  A provisional patent applicationwas filed by NIH in July 1998, with a Patent Cooperation Treatyapplication filed in July 1999, pertaining to the work performed on T b4.  On February 6, 2001, we executed an agreement with the NIH givingus an exclusive worldwide license from the NIH for all claims to T b4 within the patent application.  In exchange for the exclusive license,we must make certain royalty and milestone payments to the NIH.  Through December 31,2007 we have complied with these requirements.

 

No assurance can be givenas to whether or when certain patents will be issued, or as to any claims thatmay be included or excluded within the patent, or subsequent to its issuance  We have also filed numerous additional patent applications coveringvarious compositions, uses, formulations and other components of T b4, as well as to novel peptides resulting from our research efforts. During 2007, we were issued a patent in Europe and the U.S. related to theoriginal NIH patent that expires twenty years from the filing date July 29,1999.  Corresponding patents have been granted in Hong Kong, Australia andChina.  The issued European Patent is being opposed by a third party atthe European Patent Office.  In addition, we hold a U.S. patent relatingto the treatment of an autoimmune skin disease that results in hair loss,Alopecia.  The patent, No. 6,030,948, entitled “Hair RegenerationCompositions for Treatment of Alopecia and Method of Application RelatedThereto,” issued February 29, 2000 and expires in December of 2017,with corresponding patents granted in Europe and Singapore which expire December 18,2018.  In February 2006, we were issued a patent in China entitled “TreatingEpidermolysis Bullosa with Thymosin b 4,” which expires May 16,2022. There can be no assurance that these, or any other future patentapplications under which we have rights, will result in the issuance of apatent or that any patent issued will not be subject to challenge oropposition.  In the case of a claim of patent infringement by or againstus, there can be no assurance that we will be able to afford the expense of anylitigation that may be necessary to enforce our proprietary rights.

 

Under a researchagreement with The George Washington University (“GWU”), we funded Tb4research at GWU and were granted a sole and exclusive world-wide license to anypatents that resulted from such research.  While we no longer fundresearch under this agreement, we remain obligated to pay GWU a royalty of 4%of the net sales, if any, of specified products covered by patents issued inconnection with the agreement.  Pursuant to the research agreement, wehave exclusive rights

 

9

----

 

to patent applicationsfiled in the United States and in Europe disclosing the use of T b4for the treatment of septic shock and associated syndromes, including AdultRespiratory Distress Syndrome.  Two U.S. patents have been issued. The first patent, No. 5,578,570, entitled “Method of Treating Septic ShockUsing T b 4,” issued on November 26, 1996 and expiresin November 2013 and the second patent, No. 5,593,964, entitled “Methodof Treating Septic Shock By Preventing Actin Polymerization,” issued on January 14,1997 and expires in October 2014.  No sales have occurred and as aresult, no royalty payments have yet been incurred or paid to GWU pursuant tothe research agreement.  We have also filed other patent applications relatedto T b 4 and related compounds and indications fortheir use in countries throughout the world.

 

**MaterialAgreements**

 

*LicensingAgreements. *As noted in*Proprietary Rights* above, we are obligated to pay royalties to theNIH and GWU.  While the NIH agreement calls for a minimum annual royaltyof $25,000, other obligations will be triggered only upon the sale or licenseof our technology to a third-party.

 

*DefianteFarmaceutica, LDA. *We have exclusively licensed certaininternal and external wound healing European rights to T b4 to Defiante Farmaceutica, LDA, or Defiante, a Portuguese company that is awholly owned subsidiary of Sigma-Tau, a pharmaceutical company headquartered inRome, Italy and our largest stockholder.  These rights include indicationsrelative to all of our current dermal clinical trials and AMIs, but excludeophthalmic indications and other indications that are disease-based and not theresult of a wound. Defiante will develop T b4 for internal and external wounds in Europe and certain other contiguous andgeographically relevant countries.  The Agreement expires on acountry-by-country basis upon the later of the expiration of the last to expireof any granted patent in the territory having at least one valid claim coveringthe products then on the market, the expiration of any other exclusive orproprietary marketing rights or twelve years from the effective date of theagreement (which was in January 2004).

 

Under the Agreement,Defiante will pay us a royalty on commercial sales and we will supply allrequired Tb4.  When atleast one positive Phase II clinical trial is completed, Defiante must eitherpay us $5 million or initiate a Pivotal Phase III clinical trial to maintainthe license.  Defiante also will be obligated to attain future clinicaland regulatory milestones in the licensed territory.  As those milestonesare attained, certain performance criteria regarding commercial registrationand minimum annual royalties will be required in each licensed country. The agreement does not prevent us from sublicensing the technology in countriesoutside the licensed territory, and has no impact on any U.S. rights.

 

**ClinicalDevelopment Agreements**

 

We entered into variousagreements with a variety of outside service providers for the manufacture anddevelopment of T b 4, formulation ofproduct candidates, the conduct of pre-clinical safety, toxicology and efficacystudies in animal models, and management/execution of clinical trials inhumans.  Terms of these agreements vary, in that they can last from a fewmonths to more than a year in duration.  Certain of these agreementsrequire initial up front payments ranging from 25% to 50% of the totalestimated cost.  For additional information regarding the costs incurredfor our clinical development over the past two years, see “Item 7. Management’sDiscussion and Analysis of Financial Condition and Results of Operations”below.

 

10

----

 

**Employees**

 

To balance costs andoptimize control, we utilize an outsourcing business strategy, whereby ourinternal, experienced management experts, tightly control outsourced activitiesfor many of our research and development and administrative functions.Recognizing the periodic spikes in costs associated with a focused clinicaldevelopment effort, complicated further by the constant variation in skillsneeded at any one time, ranging from chemical drug formulation to pre-clinicalstudies to clinical trial management, we believe that the use of outsidecontractors as and when needed is more cost-effective than directly employingand maintaining facilities to support these varied efforts.  We currentlyhave ten full-time employees.

 

**CorporationInformation**

 

We were organized as aDelaware corporation in 1982.  Our principal executive offices are locatedat 3 Bethesda Metro Center, Suite 630, Bethesda, Maryland 20814.

 

**AvailableInformation**

 

For more informationabout us, visit our web site at www.regenerx.com. Our electronic filings withthe U.S. Securities and Exchange Commission (including our annual report on Form 10-K,quarterly reports on Form 10-Q and current reports on Form 8-K, andany amendments to these reports) are available free of charge through our website as soon as reasonably practicable after we have electronically filed suchinformation with, or furnished such information to, the Securities and ExchangeCommission (the “SEC”).  In addition, the public may read and copy anymaterials we filed with the SEC at the SEC’s Public Reference Room at 100F Street, NE, Washington, DC, 20549, on official business days during the hoursof 10:00 a.m. to 3:00 p.m.  The public may obtain information onthe operation of the Public Reference Room by calling the SEC at1-800-SEC-0330.  The SEC also maintains an Internet site athttp://www.sec.gov that contains reports, proxy and information statements, andother information regarding our electronic filings with the SEC.

 

11

----

 

**PART IV**

 

**Item 15.Exhibits, Financial Statement Schedules.**

 
| 31.1 & 31.2 |   | Certifications dated  April 4, 2008 |   | Certifications Pursuant  to Section 302 of the Sarbanes–Oxley Act of 2002 (filed herewith) |
|----------------------|--------|------------------------------------------|--------|------------------------------------------------------------------------------------------------------|

 

12

----

 

**SIGNATURES**

 

Pursuant to therequirements of Section 13 or 15(d) of the Exchange Act, theregistrant has duly caused this report to be signed on its behalf by theundersigned, thereunto duly authorized.

 

 
|                      | RegeneRx  Biopharmaceuticals, Inc. |
|---------------------------|-----------------------------------------|
|                      |                                    | (Registrant) |
|                      |                                    |
|                      |                                    |
| Date: April 4,  2008 |                                    |
|                      |                                    |
|                      | /s/C. Neil Lyons                        |
|                      | C. Neil Lyons                           |
|                      | Chief Financial Officer                 |

 

----