##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended: September 30, 2010
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For
the transition period from_________to_________
 Commission file number: 001-31533
 DUSA PHARMACEUTICALS, INC.
  New Jersey
    
    22-3103129(State of Other Jurisdiction of 
Incorporation or Organization)
    
    (I.R.S. Employer Identification No.)25 Upton Drive, Wilmington, MA
    
    01887(Address of Principal Executive Offices)
    
    (Zip Code)
 
 
 þ o
 o o
  Large accelerated filer o
Accelerated filer o
Non-accelerated filer þ(Do not check if a smaller reporting company)
Smaller reporting company o o þ




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##### 



DUSA
PHARMACEUTICALS, INC.
TABLE OF CONTENTS TO FORM 10-Q
 PageNumberPART I. FINANCIAL INFORMATIONItem 1. Financial Statements- Condensed Consolidated Balance Sheets at September 30, 2010 and December 31, 2009 (Unaudited)
    
    
    3- Condensed Consolidated Statements of Operations for the three- and nine-month periods ended
September 30, 2010 and 2009 (Unaudited)
    
    
    4- Condensed Consolidated Statements of Cash Flows for the nine-month periods ended September
30, 2010 and 2009 (Unaudited)
    
    
    5- Notes to the Condensed Consolidated Financial Statements (Unaudited)
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    24Item 4. Controls and Procedures
    
    
    25PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    26Item 1A. Risk Factors
    
    
    26Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    36Item 3. Defaults Upon Senior Securities
    
    
    36Item 4. Removed and reserved
    
    
    36Item 5. Other Information
    
    
    36Item 6. Exhibits
    
    
    36SIGNATURES
    
    
    37Exhibit Index
    
    
    38EX-31.A: SECTION 302 CERTIFICATION OF THE C.E.O.EX-31.B: SECTION 302 CERTIFICATION OF THE C.F.O.EX-32.A: SECTION 906 CERTIFICATION OF THE C.E.OEX-32.B: SECTION 906 CERTIFICATION OF THE C.F.O.EX-99.1: PRESS RELEASEEX-31.AEX-31.BEX-32.AEX-32.BEX-99.1
  2




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PART I.
 
 ITEM 1. FINANCIAL STATEMENTS
 
 DUSA PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
 September 30,
    
    
    December 31,2010
    
    
    2009ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    6,184,261
    
    
    $
    7,613,378Marketable securities, at fair value
    
    
    10,796,735
    
    
    
    9,055,959Accounts receivable, net of allowance for
doubtful accounts of $63,000 and $86,000
in 2010 and 2009, respectively
    
    
    2,451,709
    
    
    
    2,629,189Inventory
    
    
    2,269,605
    
    
    
    2,170,275Prepaid and other current assets
    
    
    935,815
    
    
    
    1,561,467TOTAL CURRENT ASSETS
    
    
    22,638,125
    
    
    
    23,030,268Restricted cash
    
    
    174,587
    
    
    
    174,255Property, plant and equipment, net
    
    
    1,494,630
    
    
    
    1,660,755Deferred charges and other assets
    
    
    68,099
    
    
    
    68,099TOTAL ASSETS
    
    $
    24,375,441
    
    
    $
    24,933,377LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESAccounts payable
    
    $
    675,870
    
    
    $
    630,144Accrued compensation
    
    
    1,029,035
    
    
    
    1,260,609Other accrued expenses
    
    
    2,128,985
    
    
    
    2,456,612Deferred revenues
    
    
    475,034
    
    
    
    902,597TOTAL CURRENT LIABILITIES
    
    
    4,308,924
    
    
    
    5,249,962Deferred revenues
    
    
    2,255,650
    
    
    
    2,906,020Warrant liability
    
    
    1,299,869
    
    
    
    812,905Other liabilities
    
    
    80,015
    
    
    
    123,016TOTAL LIABILITIES
    
    
    7,944,458
    
    
    
    9,091,903COMMITMENTS AND CONTINGENCIES (NOTE 13)SHAREHOLDERS EQUITYCapital StockAuthorized: 100,000,000 shares;
40,000,000 shares designated as common
stock, no par, and 60,000,000 shares
issuable in Series or classes; and 40,000
junior Series A preferred shares. Issued
and outstanding: 24,221,715 and
24,108,908 shares of common stock, no
par, at September 30, 2010 and December
31, 2009, respectively
    
    
    151,801,550
    
    
    
    151,683,399Additional paid-in capital
    
    
    9,077,912
    
    
    
    8,291,805Accumulated deficit
    
    
    (144,562,682
    )
    
    
    (144,359,217
    )Accumulated other comprehensive income
    
    
    114,203
    
    
    
    225,487TOTAL SHAREHOLDERS EQUITY
    
    
    16,430,983
    
    
    
    15,841,474TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    24,375,441
    
    
    $
    24,933,377
  3




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DUSA PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
 Three-months ended
    
    
    Nine-months endedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Product revenues
    
    $
    8,015,546
    
    
    $
    6,930,110
    
    
    $
    25,430,363
    
    
    $
    21,033,920Cost of product revenues
    
    
    1,627,782
    
    
    
    1,594,692
    
    
    
    5,228,075
    
    
    
    4,973,782GROSS MARGIN
    
    
    6,387,764
    
    
    
    5,335,418
    
    
    
    20,202,288
    
    
    
    16,060,138Operating costs:Research and development
    
    
    1,283,771
    
    
    
    963,245
    
    
    
    3,643,849
    
    
    
    3,225,049Marketing and sales
    
    
    2,792,780
    
    
    
    3,013,351
    
    
    
    9,544,564
    
    
    
    9,460,766General and administrative
    
    
    2,208,898
    
    
    
    1,877,928
    
    
    
    6,919,128
    
    
    
    6,360,325Settlements, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    75,000TOTAL OPERATING COSTS
    
    
    6,285,449
    
    
    
    5,854,524
    
    
    
    20,107,541
    
    
    
    19,121,140INCOME (LOSS) FROM OPERATIONS
    
    
    102,315
    
    
    
    (519,106
    )
    
    
    94,747
    
    
    
    (3,061,002
    )Other income
    
    
    61,183
    
    
    
    79,815
    
    
    
    188,752
    
    
    
    223,801(Loss) gain on change in fair value of warrants
    
    
    (130,674
    )
    
    
    24,051
    
    
    
    (486,964
    )
    
    
    (37,679
    )NET INCOME (LOSS)
    
    $
    32,824
    
    
    $
    (415,240
    )
    
    $
    (203,465
    )
    
    $
    (2,874,880
    )BASIC AND DILUTED NET INCOME (LOSS) PER
COMMON SHARE
    
    $
    0.00
    
    
    $
    (0.02
    )
    
    $
    (0.01
    )
    
    $
    (0.12
    )WEIGHTED AVERAGE COMMON SHARES OUTSTANDING,
BASIC
    
    
    24,209,215
    
    
    
    24,108,908
    
    
    
    24,173,399
    
    
    
    24,099,786WEIGHTED AVERAGE COMMON SHARES OUTSTANDING, DILUTED
    
    
    24,658,844
    
    
    
    24,108,908
    
    
    
    24,173,399
    
    
    
    24,099,786
  4




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DUSA PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 Nine-months endedSeptember 30,2010
    
    
    2009CASH FLOWS FROM OPERATING ACTIVITIESNet loss
    
    $
    (203,465
    )
    
    $
    (2,874,880
    )Adjustments to reconcile net loss to net cash provided by (used in)
operating activities:Accretion of premiums and discounts on marketable securities
    
    
    5,236
    
    
    
    43,407Realized loss on sales of marketable securities
    
    
    
    
    
    
    43,678Share-based compensation
    
    
    920,755
    
    
    
    631,770Depreciation and amortization
    
    
    295,020
    
    
    
    345,720Loss on change in fair value of warrants
    
    
    486,964
    
    
    
    37,679Deferred revenues recognized
    
    
    (1,077,933
    )
    
    
    (661,702
    )Changes in other assets and liabilities impacting cash flows from operations:Accounts receivable
    
    
    177,480
    
    
    
    (151,411
    )Inventory
    
    
    (99,330
    )
    
    
    476,658Prepaid and other current assets
    
    
    625,652
    
    
    
    318,994Accounts payable, accrued compensation and other accrued expenses
    
    
    (513,474
    )
    
    
    (1,626,748
    )Other liabilities
    
    
    (43,001
    )
    
    
    (111,129
    )NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
    
    
    573,904
    
    
    
    (3,527,964
    )CASH FLOWS FROM INVESTING ACTIVITIESPurchases of marketable securities
    
    
    (12,742,296
    )
    
    
    (12,049,905
    )Proceeds from maturities and sales of marketable securities
    
    
    10,885,000
    
    
    
    16,848,159Restricted cash
    
    
    (332
    )
    
    
    (326
    )Purchases of property, plant and equipment
    
    
    (128,896
    )
    
    
    (129,230
    )NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES
    
    
    (1,986,524
    )
    
    
    4,668,698CASH FLOWS FROM FINANCING ACTIVITIESProceeds from exercise of stock options
    
    
    25,993
    
    
    
    Settlements of restricted stock for tax withholding obligations
    
    
    (42,490
    )
    
    
    (4,413
    )NET CASH USED IN FINANCING ACTIVITIES
    
    
    (16,497
    )
    
    
    (4,413
    )NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    (1,429,117
    )
    
    
    1,136,321CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
    
    
    7,613,378
    
    
    
    3,880,673CASH AND CASH EQUIVALENTS AT END OF PERIOD
    
    $
    6,184,261
    
    
    $
    5,016,994
  5




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DUSA PHARMACEUTICALS, INC.
 
 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 1) BASIS OF PRESENTATION
   2) NEW ACCOUNTING PRONOUNCEMENTS
 Accounting Standards Recently Adopted
 Revenue Recognition  Milestone Method (Topic
605): Milestone Method of Revenue Recognition
 Accounting Standards To Be Adopted
 Multiple-Deliverable Revenue Arrangements
 3) FINANCIAL INSTRUMENTS
 Fair Value Measurements
   6




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Fair Value Measurements at September 30, 2010Carrying Value
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)AssetsCash and cash equivalents
    
    $
    6,184,000
    
    
    $
    6,184,000
    
    
    $
    
    
    
    $
    United States government-backed securities
    
    
    10,010,000
    
    
    
    
    
    
    
    10,010,000
    
    
    
    Corporate debt securities
    
    
    787,000
    
    
    
    
    
    
    
    787,000
    
    
    
    Total assets at fair value
    
    
    16,981,000
    
    
    
    6,184,000
    
    
    
    10,797,000
    
    
    
    LiabilitiesWarrant liability
    
    
    1,300,000
    
    
    
    
    
    
    
    
    
    
    
    1,300,000Total liabilities at fair value
    
    $
    1,300,000
    
    
    $
    
    
    
    $
    
    
    
    $
    1,300,000
 Fair Value Measurements at December 31, 2009Carrying Value
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)AssetsCash and cash equivalents
    
    $
    7,613,000
    
    
    $
    7,613,000
    
    
    $
    
    
    
    $
    United States government-backed securities
    
    
    8,150,000
    
    
    
    
    
    
    
    8,150,000
    
    
    
    Corporate debt securities
    
    
    906,000
    
    
    
    
    
    
    
    906,000
    
    
    
    Total assets at fair value
    
    
    16,669,000
    
    
    
    7,613,000
    
    
    
    9,056,000
    
    
    
    LiabilitiesWarrant liability
    
    
    813,000
    
    
    
    
    
    
    
    
    
    
    
    813,000Total liabilities at fair value
    
    $
    813,000
    
    
    $
    
    
    
    $
    
    
    
    $
    813,000
   7




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Fair Value Measurements Using Significant Unobservable Inputs (Level 3)Nine-month Period Ended September 30, 2010Change inUnrealizedGainsRelated toPurchases,
    
    
    
    
    
    
    
    
    
    FinancialFair Value
    
    
    
    
    
    Sales,
    
    Transfers
    
    
    
    
    
    Instrumentsat
    
    Total
    
    Issuances,
    
    In and/or
    
    Fair Value at
    
    Held atJanuary 1,
    
    Unrealized
    
    Settlements,
    
    Out of
    
    September 30,
    
    September 302010
    
    Loss
    
    net
    
    Level 3
    
    2010
    
    2010Warrant Liability
    
    $
    813,000
    
    
    $
    487,000
    
    
    $
    
    
    
    $
    
    
    
    $
    1,300,000
    
    
    $
    (487,000
    )
 Fair Value Measurements Using Significant Unobservable Inputs (Level 3)Nine-month Period Ended September 30, 2009Change inUnrealizedGainsRelated toPurchases,
    
    
    
    
    
    
    
    
    
    FinancialFair Value
    
    
    
    
    
    Sales,
    
    Transfers
    
    Fair Value
    
    Instrumentsat
    
    Total
    
    Issuances,
    
    In and/or
    
    at
    
    Held atJanuary 1,
    
    Unrealized
    
    Settlements,
    
    Out of
    
    September 30,
    
    September 30,2009
    
    Loss
    
    net
    
    Level 3
    
    2009
    
    2009Warrant Liability
    
    $
    436,000
    
    
    $
    38,000
    
    
    $
    
    
    
    $
    
    
    
    $
    474,000
    
    
    $
    (38,000
    )
 Marketable Securities
 The Companys marketable securities consist of the following:
 September 30, 2010Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueUnited States government-backed securities
    
    $
    9,955,000
    
    
    $
    55,000
    
    
    $
    
    
    
    $
    10,010,000Corporate debt securities
    
    
    728,000
    
    
    
    59,000
    
    
    
    
    
    
    
    787,000Total marketable securities
    
    $
    10,683,000
    
    
    $
    114,000
    
    
    $
    
    
    
    $
    10,797,000
 December 31, 2009Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueUnited States government-backed securities
    
    $
    8,005,000
    
    
    $
    145,000
    
    
    $
    
    
    
    $
    8,150,000Corporate debt securities
    
    
    826,000
    
    
    
    80,000
    
    
    
    
    
    
    
    906,000Total marketable securities
    
    $
    8,831,000
    
    
    $
    225,000
    
    
    $
    
    
    
    $
    9,056,000
  Common Stock Warrants
  8




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September 30,
    
    December 31,2010
    
    2009Expected volatility
    
    
    83.6
    %
    
    
    88.0
    %Remaining contractual term (years)
    
    
    2.6
    
    
    
    3.3Risk-free interest rate
    
    
    0.53
    %
    
    
    1.9
    %Expected dividend yield
    
    
    0
    %
    
    
    0
    %Common stock price
    
    $
    2.45
    
    
    $
    1.60
 4) CONCENTRATIONS
  % of Revenue
    
    % of RevenueThree months ended
    
    Nine months ended
    
    % of Accounts ReceivableSeptember 30,
    
    September 30,
    
    September 30,
    
    September 30,
    
    September 30,
    
    December 31,2010
    
    2009
    
    2010
    
    2009
    
    2010
    
    2009Customer A
    
    
    3
    %
    
    
    3
    %
    
    
    3
    %
    
    
    3
    %
    
    
    5
    %
    
    
    3
    %Customer B
    
    
    2
    %
    
    
    3
    %
    
    
    2
    %
    
    
    3
    %
    
    
    5
    %
    
    
    5
    %Customer C
    
    
    2
    %
    
    
    2
    %
    
    
    2
    %
    
    
    3
    %
    
    
    3
    %
    
    
    4
    %Other customers
    
    
    93
    %
    
    
    92
    %
    
    
    93
    %
    
    
    91
    %
    
    
    87
    %
    
    
    88
    %Total
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
  5) INVENTORY
  September 30,
    
    
    December 31,2010
    
    
    2009Finished goods
    
    $
    1,157,000
    
    
    $
    974,000BLU-U® evaluation units
    
    
    121,000
    
    
    
    58,000Work in process
    
    
    345,000
    
    
    
    398,000Raw materials
    
    
    647,000
    
    
    
    740,000Total
    
    $
    2,270,000
    
    
    $
    2,170,000
 ®
 9




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##### Table of Contents



6) OTHER ACCRUED EXPENSES
  September 30,
    
    December 31,2010
    
    2009Research and development costs
    
    $
    104,000
    
    
    $
    92,000Marketing and sales costs
    
    
    157,000
    
    
    
    418,000Reserve for sales returns and allowances
    
    
    150,000
    
    
    
    225,000Other product related costs
    
    
    775,000
    
    
    
    849,000Legal and other professional fees
    
    
    403,000
    
    
    
    334,000Due to former Sirius shareholders
    
    
    228,000
    
    
    
    214,000Employee benefits
    
    
    284,000
    
    
    
    271,000Other accrued expenses
    
    
    28,000
    
    
    
    54,000Total
    
    $
    2,129,000
    
    
    $
    2,457,000
 7)
    
    SHARE-BASED COMPENSATION
 Modifications To Equity Awards For Former Members Of The Board Of Directors
   Three-months ended
    
    Nine-months endedSeptember 30, 2010
    
    September 30, 2009
    
    September 30, 2010
    
    September 30, 2009Cost of product revenues
    
    $
    11,000
    
    
    $
    13,000
    
    
    $
    38,000
    
    
    $
    47,000Research and development
    
    
    29,000
    
    
    
    31,000
    
    
    
    94,000
    
    
    
    112,000Marketing and sales
    
    
    37,000
    
    
    
    62,000
    
    
    
    83,000
    
    
    
    65,000General and administrative
    
    
    356,000
    
    
    
    101,000
    
    
    
    706,000
    
    
    
    408,000Share-based compensation expense
    
    $
    433,000
    
    
    $
    207,000
    
    
    $
    921,000
    
    
    $
    632,000
 Incentive And Non-qualified Stock Options
  Three months
    
    
    Nine monthsended September 30, 2010Expected volatility
    
    
    75.80
    %
    
    
    75.45
    %Risk-free interest rate
    
    
    1.82
    %
    
    
    2.60
    %Expected dividend yield
    
    
    0
    %
    
    
    0
    %Expected life-directors and officers (years)
    
    
    6.03
    
    
    
    6.03Expected life-non-officer employees (years)
    
    
    5.77
    
    
    
    5.77
 10




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AverageWeighted
    
    
    RemainingAverage
    
    
    Contractual
    
    
    AggregateExercise
    
    
    Term
    
    
    IntrinsicPrice
    
    
    (Years)
    
    
    ValueOutstanding, beginning of period, January 1, 2010
    
    
    2,664,000
    
    
    $
    6.71
    
    
    
    
    
    
    $Options granted
    
    
    731,100
    
    
    $
    1.75Options forfeited
    
    
    (19,800
    )
    
    $
    2.17Options expired
    
    
    (181,900
    )
    
    $
    25.84Options exercised
    
    
    (20,650
    )
    
    $
    1.26Outstanding, end of period
    
    
    3,172,750
    
    
    $
    4.54
    
    
    
    4.66
    
    
    $
    1,600,037Exercisable, end of period
    
    
    1,872,238
    
    
    $
    6.56
    
    
    
    3.94
    
    
    $
    457,539Options vested and expected to vest, end of period
    
    
    3,013,008
    
    
    $
    4.70
    
    
    
    4.59
    
    
    $
    1,455,923
 Unvested Shares Of Common Stock
  2010
    
    
    2009Outstanding, beginning of period, January 1, 2010
    
    
    393,250
    
    
    
    91,000Shares granted
    
    
    308,000
    
    
    
    325,000Shares vested
    
    
    (115,250
    )
    
    
    (22,750
    )Outstanding, end of period, September 30, 2010
    
    
    586,000
    
    
    
    393,250Weighted average grant date fair value of shares vested during period
    
    $
    1.41
    
    
    $
    2.20Weighted average grant date fair value of shares granted during period
    
    $
    1.65
    
    
    $
    1.22Weighted average grant date fair value of unvested shares, end of period
    
    $
    1.52
    
    
    $
    1.39Weighted average remaining years to vest
    
    
    2.90
    
    
    
    3.30
  8) BASIC AND DILUTED NET LOSS PER SHARE
  Three months ended
    
    
    Nine months endedSeptember 30, 2010
    
    
    September 30, 2009
    
    
    September 30, 2010
    
    
    September 30, 2009Weighted average
common shares
outstanding-basic
    
    
    24,209,215
    
    
    
    24,108,908
    
    
    
    24,173,399
    
    
    
    24,099,786Stock options and
unvested shares of
common stock
    
    
    449,629
    
    
    
    
    
    
    
    
    
    
    
    Weighted average
common shares
outstanding-diluted
    
    
    24,658,844
    
    
    
    24,108,908
    
    
    
    24,173,399
    
    
    
    24,099,786
 11




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##### Table of Contents



Three months ended
    
    Nine months endedSeptember 30, 2010
    
    September 30, 2009
    
    September 30, 2010
    
    September 30, 2009Stock options
    
    
    2,934,000
    
    
    
    3,590,000
    
    
    
    3,173,000
    
    
    
    3,590,000Warrants
    
    
    1,395,000
    
    
    
    1,395,000
    
    
    
    1,395,000
    
    
    
    1,395,000Unvested shares of common stock
    
    
    375,000
    
    
    
    393,000
    
    
    
    586,000
    
    
    
    393,000Total
    
    
    4,704,000
    
    
    
    5,378,000
    
    
    
    5,154,000
    
    
    
    5,378,000
 9) SEGMENT REPORTING
  Three-month period ended
    
    Nine-month period endedSeptember 30,
    
    September 30,
    
    September 30,
    
    September 30,2010
    
    2009
    
    2010
    
    2009REVENUESPDT drug and device product revenues
    
    $
    7,837,000
    
    
    $
    6,700,000
    
    
    $
    24,544,000
    
    
    $
    19,836,000Non-PDT product revenues
    
    
    179,000
    
    
    
    230,000
    
    
    
    886,000
    
    
    
    1,198,000Total revenues
    
    
    8,016,000
    
    
    
    6,930,000
    
    
    
    25,430,000
    
    
    
    21,034,000COSTS OF REVENUESPDT drug and device cost of product
revenues
    
    
    1,305,000
    
    
    
    1,226,000
    
    
    
    4,348,000
    
    
    
    4,227,000Non-PDT cost of product revenues
    
    
    323,000
    
    
    
    369,000
    
    
    
    880,000
    
    
    
    747,000Total costs of product revenues
    
    
    1,628,000
    
    
    
    1,595,000
    
    
    
    5,228,000
    
    
    
    4,974,000GROSS MARGINPDT drug and device product revenues
    
    
    6,532,000
    
    
    
    5,474,000
    
    
    
    20,196,000
    
    
    
    15,609,000Non-PDT product gross margin
    
    
    (144,000
    )
    
    
    (139,000
    )
    
    
    6,000
    
    
    
    451,000Total gross margin
    
    $
    6,388,000
    
    
    $
    5,335,000
    
    
    $
    20,202,000
    
    
    $
    16,060,000
  Three-months ended
    
    Nine-months endedSeptember 30,
    
    September 30,
    
    September 30,
    
    September 30,2010
    
    2009
    
    2010
    
    2009United States
    
    
    89
    %
    
    
    94
    %
    
    
    94
    %
    
    
    95
    %Canada
    
    
    2
    %
    
    
    2
    %
    
    
    2
    %
    
    
    2
    %Korea
    
    
    1
    %
    
    
    3
    %
    
    
    1
    %
    
    
    2
    %Latin America
    
    
    8
    %
    
    
    1
    %
    
    
    3
    %
    
    
    1
    %Total
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
 12




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##### Table of Contents



10) COMPREHENSIVE LOSS
  Three-months ended
    
    Nine-months endedSeptember 30,
    
    September 30,2010
    
    2009
    
    2010
    
    2009NET INCOME (LOSS)
    
    $
    33,000
    
    
    $
    (415,000
    )
    
    $
    (203,000
    )
    
    $
    (2,875,000
    )Change in net
unrealized (losses)
gains on marketable
securities
available-for-sale
    
    
    (36,000
    )
    
    
    (34,000
    )
    
    
    (111,000
    )
    
    
    (105,000
    )COMPREHENSIVE LOSS
    
    $
    (3,000
    )
    
    $
    (449,000
    )
    
    $
    (314,000
    )
    
    $
    (2,980,000
    )
 11) SIGNIFICANT PRODUCT AGREEMENTS
 Stiefel Agreement
 ®
 Daewoong Agreement
 ® ® ®
 Photocure Agreement
 ® ® ®
  13




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##### Table of Contents



12) INCOME TAXES
  13) COMMITMENTS AND CONTINGENCIES
 Business Acquisition
   AdditionalCumulative Sales Milestone:
    
    Consideration:$35.0 million
    
    $1.0 million$45.0 million
    
    $1.0 millionTotal
    
    $2.0 million
 Third Amendment To Merger Agreement
    14




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##### Table of Contents



Lease Arrangements
  OperatingLeaseYears Ending December 31,
    
    Obligations2010
    
    $
    117,0002011
    
    
    464,0002012
    
    
    438,0002013
    
    
    Thereafter
    
    
    Total
    
    $
    1,019,000
 Legal Matters
 Rivers Edge Litigation Settlement
 ® ®
 ® ®
 Settlements, net  Winston Laboratories Arbitration Settlement
  
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
 OVERVIEW
  15




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® ® ® ® ®
 ® ® ® ® ® ® ®
 ® ® ® ® ®
 ® ® ®
 ® ® ® ® ® ® ® ® ® ® ® ®
 ® ® ® ®
 CRITICAL ACCOUNTING POLICIES
  16




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RESULTS OF OPERATIONS THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2010 VERSUS SEPTEMBER
30, 2009
 REVENUES
 Three months ended
    
    
    
    
    
    
    Nine months endedSeptember 30,
    
    
    
    
    
    
    September 30,INCREASE/
    
    
    
    
    
    
    
    
    
    
    INCREASE/2010
    
    
    2009
    
    
    (DECREASE)
    
    
    2010
    
    
    2009
    
    
    (DECREASE)PDT product revenuesLevulan®
Kerastick®
product revenuesUnited States
    
    $
    6,663,000
    
    
    $
    5,790,000
    
    
    $
    873,000
    
    
    $
    21,780,000
    
    
    $
    17,096,000
    
    
    $
    4,684,000Canada
    
    
    153,000
    
    
    
    162,000
    
    
    
    (9,000
    )
    
    
    379,000
    
    
    
    404,000
    
    
    
    (25,000
    )Korea
    
    
    109,000
    
    
    
    201,000
    
    
    
    (92,000
    )
    
    
    322,000
    
    
    
    498,000
    
    
    
    (176,000
    )Latin America
    
    
    602,000
    
    
    
    78,000
    
    
    
    524,000
    
    
    
    778,000
    
    
    
    226,000
    
    
    
    552,000Rest-of-world
    
    
    15,000
    
    
    
    13,000
    
    
    
    2,000
    
    
    
    57,000
    
    
    
    35,000
    
    
    
    22,000Subtotal
Levulan®
Kerastick®
product revenues
    
    
    7,542,000
    
    
    
    6,244,000
    
    
    
    1,298,000
    
    
    
    23,316,000
    
    
    
    18,259,000
    
    
    
    5,057,000BLU-U®
product revenuesUnited States
    
    
    295,000
    
    
    
    456,000
    
    
    
    (161,000
    )
    
    
    1,223,000
    
    
    
    1,577,000
    
    
    
    (354,000
    )Canada
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,000
    
    
    
    
    
    
    
    5,000Subtotal
BLU-U® product
revenues
    
    
    295,000
    
    
    
    456,000
    
    
    
    (161,000
    )
    
    
    1,228,000
    
    
    
    1,577,000
    
    
    
    (349,000
    )Total PDT product
revenues
    
    
    7,837,000
    
    
    
    6,700,000
    
    
    
    1,137,000
    
    
    
    24,544,000
    
    
    
    19,836,000
    
    
    
    4,708,000Total Non-PDT product
revenues
    
    
    179,000
    
    
    
    230,000
    
    
    
    (51,000
    )
    
    
    886,000
    
    
    
    1,198,000
    
    
    
    (312,000
    )Total product revenues
    
    $
    8,016,000
    
    
    $
    6,930,000
    
    
    $
    1,086,000
    
    
    $
    25,430,000
    
    
    $
    21,034,000
    
    
    $
    4,396,000
 ® ® ®
 ® ® ® ® ® ® ®
 ® ®
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® ® ® ®
 ® ® ® ® ® ® Legal Matters
 ® ® ® ® ® ® ®
 18




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##### Table of Contents



COST OF PRODUCT REVENUES
 THREE MONTHS ENDED SEPTEMBER 30,INCREASE/2010
    
    2009
    
    (DECREASE)Levulan® Kerastick® cost of product revenues and
royaltiesDirect Levulan® Kerastick® product costs
    
    $
    623,000
    
    
    $
    583,000
    
    
    $
    40,000Other Levulan® Kerastick® production costs including internal
costs assigned to support products, net
    
    
    90,000
    
    
    
    50,000
    
    
    
    40,000Royalty and supply fees (1)
    
    
    275,000
    
    
    
    238,000
    
    
    
    37,000Subtotal Levulan® Kerastick® cost of product revenues and
royalties
    
    $
    988,000
    
    
    $
    871,000
    
    
    $
    117,000BLU-U® cost of product revenuesDirect BLU-U® product costs
    
    $
    151,000
    
    
    $
    212,000
    
    
    $
    (61,000
    )Other BLU-U® product costs including internal costs assigned to support
products; as well as, costs incurred to ship and install the BLU-U® in
physicians offices
    
    
    166,000
    
    
    
    143,000
    
    
    
    23,000Subtotal BLU-U® cost of product revenues
    
    $
    317,000
    
    
    $
    355,000
    
    
    $
    (38,000
    )TOTAL PDT DRUG AND DEVICE COST OF PRODUCT REVENUES AND ROYALTIES
    
    $
    1,305,000
    
    
    $
    1,226,000
    
    
    $
    79,000Non-PDT drug cost of product revenues and royalties
    
    $
    323,000
    
    
    $
    369,000
    
    
    $
    (46,000
    )TOTAL COST OF PRODUCT REVENUES AND ROYALTIES
    
    $
    1,628,000
    
    
    $
    1,595,000
    
    
    $
    33,000
 NINE MONTHS ENDED SEPTEMBER 30,INCREASE/2010
    
    2009
    
    (DECREASE)Levulan® Kerastick® cost of product revenues and
royaltiesDirect Levulan® Kerastick® product costs
    
    $
    1,953,000
    
    
    $
    1,686,000
    
    
    $
    267,000Other Levulan® Kerastick® production costs including internal
costs assigned to support products, net
    
    
    222,000
    
    
    
    498,000
    
    
    
    (276,000
    )Royalty and supply fees (1)
    
    
    891,000
    
    
    
    726,000
    
    
    
    165,000Subtotal Levulan® Kerastick® cost of product revenues and
royalties
    
    $
    3,066,000
    
    
    $
    2,910,000
    
    
    $
    156,000BLU-U® cost of product revenuesDirect BLU-U® product costs
    
    $
    663,000
    
    
    $
    712,000
    
    
    $
    (49,000
    )Other BLU-U® product costs including internal costs assigned to support
products; as well as, costs incurred to ship and install the BLU-U® in
physicians offices
    
    
    619,000
    
    
    
    605,000
    
    
    
    14,000Subtotal BLU-U® cost of product revenues
    
    $
    1,282,000
    
    
    $
    1,317,000
    
    
    $
    (35,000
    )TOTAL PDT DRUG AND DEVICE COST OF PRODUCT REVENUES AND ROYALTIES
    
    $
    4,348,000
    
    
    $
    4,227,000
    
    
    $
    121,000Non-PDT drug cost of product revenues and royalties
    
    $
    880,000
    
    
    $
    747,000
    
    
    $
    133,000TOTAL COST OF PRODUCT REVENUES AND ROYALTIES
    
    $
    5,228,000
    
    
    $
    4,974,000
    
    
    $
    254,000
 
 1)
    
    Royalty and supply fees reflect amounts paid to our licensor,
PARTEQ Research and Development Innovations, the licensing arm of
Queens University, Kingston, Ontario, and ongoing royalties paid
to Draxis Health, Inc., on sales of the Levulan®
Kerastick® in Canada. MARGINS
 19




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THREE MONTHS ENDED SEPTEMBER 30,INCREASE/2010
    
    
    
    
    
    2009
    
    
    
    
    
    (DECREASE)Levulan® Kerastick® gross margin
    
    $
    6,554,000
    
    
    
    87
    %
    
    $
    5,373,000
    
    
    
    86
    %
    
    $
    1,181,000BLU-U® gross margin
    
    
    (22,000
    )
    
    
    (7
    )%
    
    
    101,000
    
    
    
    22
    %
    
    
    (123,000
    )Total PDT drug & device gross margin
    
    $
    6,532,000
    
    
    
    83
    %
    
    $
    5,474,000
    
    
    
    82
    %
    
    $
    1,058,000Total Non-PDT drug gross margin
    
    
    (144,000
    )
    
    
    (81
    )%
    
    
    (139,000
    )
    
    
    (60
    )%
    
    $
    (5,000
    )TOTAL GROSS MARGIN
    
    $
    6,388,000
    
    
    
    80
    %
    
    $
    5,335,000
    
    
    
    77
    %
    
    $
    1,053,000
 NINE MONTHS ENDED SEPTEMBER 30,INCREASE/2010
    
    
    
    
    
    2009
    
    
    
    
    
    (DECREASE)Levulan® Kerastick® gross margin
    
    $
    20,250,000
    
    
    
    87
    %
    
    $
    15,349,000
    
    
    
    84
    %
    
    $
    4,901,000BLU-U® gross margin
    
    
    (54,000
    )
    
    
    (4
    )%
    
    
    260,000
    
    
    
    16
    %
    
    
    (314,000
    )Total PDT drug & device gross margin
    
    $
    20,196,000
    
    
    
    82
    %
    
    $
    15,609,000
    
    
    
    79
    %
    
    $
    4,587,000Total Non-PDT drug gross margin
    
    
    6,000
    
    
    
    1
    %
    
    
    451,000
    
    
    
    38
    %
    
    $
    (445,000
    )TOTAL GROSS MARGIN
    
    $
    20,202,000
    
    
    
    79
    %
    
    $
    16,060,000
    
    
    
    76
    %
    
    $
    4,142,000
 ® ® ®
 ® ® ®
 ®
 RESEARCH AND DEVELOPMENT COSTS ®
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MARKETING AND SALES COSTS
 GENERAL AND ADMINISTRATIVE COSTS
 SETTLEMENTS, NET
 OTHER INCOME, NET
 (LOSS) GAIN ON CHANGE IN FAIR VALUE OF WARRANTS
 NET INCOME (LOSS)
 ®
 LIQUIDITY AND CAPITAL RESOURCES
  21




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® ® ®
   AdditionalCumulative Sales Milestone:
    
    Consideration:$35.0 million
    
    $1.0 million$45.0 million
    
    $1.0 millionTotal
    
    $2.0 million
   Contractual Obligations and Other Commercial Commitments
 L. Perrigo Company
  Merger With Sirius Laboratories, Inc.
 ®
 22




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®
   PARTEQ Agreement
 ®
  National Biological Corporation Amended And Restated Purchase And Supply Agreement
 ®
 Sochinaz SA
 ®
 Lease Agreements
  23




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##### Table of Contents



Research Agreements
   Total
    
    
    1 Yr or less
    
    
    2-3 Years
    
    
    4-5 Years
    
    
    After 5Operating lease obligations
    
    $
    1,019,000
    
    
    $
    464,000
    
    
    $
    555,000
    
    
    $
    
    
    
    $
    Purchase obligations (1, 2)
    
    
    2,008,000
    
    
    
    1,752,000
    
    
    
    256,000
    
    
    
    
    
    
    
    Minimum royalty obligations (3)
    
    
    541,000
    
    
    
    347,000
    
    
    
    194,000
    
    
    
    
    
    
    
    Total obligations
    
    $
    3,568,000
    
    
    $
    2,563,000
    
    
    $
    1,005,000
    
    
    $
    
    
    
    $
    
 
 1)
    
    Research and development projects include various commitments including obligations for our
study on the treatment of actinic keratoses and reduction of non-melanoma skin cancers in
immunosuppressed solid organ transplant recipients, or SOTR, who have demonstrated that they
are at risk of developing multiple squamous cell carcinomas.2)
    
    In addition to the obligations disclosed above, we have contracted with Therapeutics, Inc.,
a clinical research organization, to manage the clinical development of our products in the
field of dermatology. This organization has the opportunity for additional stock grants,
bonuses, and other incentives for each product indication ranging from $250,000 to
$1,250,000, depending on the regulatory phase of development of products under Therapeutics
management.3)
    
    Minimum royalty obligations relate to our agreements with PARTEQ and Perrigo described above.  INFLATION
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
 Interest Rates
   Derivative Financial Instruments
  24




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Currency Exchange Rates
    
 ITEM 4. CONTROLS AND PROCEDURES.
   Forward-Looking Statements Safe Harbor
 ® ® ® ®
 25




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®
  
 PART II  OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS.
  
 ITEM 1A. RISK FACTORS.
   Risks Related To DUSA
 We May Not Be Profitable On An Annual Basis And May Not Be Profitable In The Future Unless
We Can Successfully Market And Sell Significantly Higher Quantities Of Our Products.
 If We Do Not Become Profitable, We May Need More Capital.
  26




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If A Competitive Product Is Successful Our Revenues Could Decline, And Our Ability To
Become Profitable Could Be Delayed.
 ® ® ® ® ® ®
 Any Failure To Comply With Ongoing Governmental Regulations In The United States And
Elsewhere Will Limit Our Ability To Market Our Products And Become Profitable.
  
    
    approval of manufacturing facilities, including adherence to good manufacturing and
laboratory practices during production and storage,
    
    controlled research and testing of some of these products even after approval,
    
    control of marketing activities, including advertising and labeling, and
    
    state permits for the sale and distribution of products manufactured in and out-of-state.
  
    
    send warning letters,
    
    impose fines and other civil penalties on us,
    
    seize our products,
    
    suspend our regulatory approvals,
    
    cease the manufacture of our products,
    
    refuse to approve pending applications or supplements to approved applications filed by us,
    
    refuse to permit exports of our products from the United States,
    
    require us to recall products,
    
    require us to notify physicians of labeling changes and/or product related problems,
    
    impose restrictions on our operations, and/or
    
    criminally prosecute us.
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® ® ®
 ® ®
 If Product Sales Do Not Continue to Increase, We May Not Be Able To Advance Development Of
Our Other Potential Products As Quickly As We Would Like To, Which Would Delay The
Approval Process And Marketing Of New Potential Products, If Approved.
  The Current Global Credit And Financial Market Conditions May Affect Our Business.
  ® ®
 If The Economic Slowdown Adversely Affects Our Customers Ability To Meet Our Payment
Terms, Our Cash Flow Would Be Adversely Affected And Our Ability To Achieve Profitability
On An Annual Basis Could Be Delayed.
  28




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We Have Had Significant Losses And May Have Losses In The Future.
  Our Ability To Use Net Operating Loss Carryforwards and Tax Credit Carryforwards To Offset
Future Taxable Income May Be Further Limited As A Result Of Past Or Future Transactions
Involving Our Common Stock.
  If We Are Unable To Obtain The Necessary Capital To Fund Our Operations, We Will Have To
Delay Our Development Program And May Not Be Able To Complete Our Clinical Trials.
   We Have Limited Patent Protection, And If We Are Unable To Protect Our Proprietary Rights,
Competitors Might Be Able To Develop Similar Products To Compete With Our Products And
Technology.
 ®
 
    
    methods of using ALA and its unique physical forms in combination with light to treat conditions such as AKs and acne,
    
    compositions and apparatus for those methods, and
    
    unique physical forms of ALA.
 ® ®
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®
 ® ® ®
  
    
    these persons or entities might breach the agreements,
    
    we might not have adequate remedies for a breach, and/or,
    
    our competitors will independently develop or otherwise discover our trade secrets.
 Litigation Is Expensive And We May Not Be Able To Afford The Costs.
   30




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Since We Now Operate The Only FDA Approved Manufacturing Facility For The
Kerastick ® And Continue To Rely Heavily On Sole Suppliers For The Manufacture
Of Levulan ® The BLU-U ® ClindaReach ® And
Meted ® Any Supply Or Manufacturing Problems Could Negatively Impact Our Sales
 ® ® ® ® ® ®
  
    
    product yields,
    
    quality control,
    
    component and service availability,
    
    compliance with FDA regulations, and
    
    the need for further FDA approval if manufacturers make material changes to manufacturing processes and/or facilities.
  We Have Only Limited Experience Marketing And Selling Pharmaceutical Products Outside Of
The United States And As A Result, Our Revenues From Product Sales May Suffer.
 ® ® ®
 The Commercial Success Of Any Product That We May Develop Will Depend Upon The Degree Of
Market Acceptance Of Our Products Among Physicians, Patients, Health Care Payors, Private
Health Insurers And The Medical Community.
  
    
    the effectiveness, or perceived effectiveness, of our product in comparison to competing products,
    
    the existence of any significant side effects, as well as their severity in comparison to any competing products,
    
    potential advantages over alternative treatments,
    
    the ability to offer our product for sale at competitive prices,
    
    relative convenience and ease of administration,
    
    the strength of marketing and distribution support, and
    
    sufficient third-party coverage or reimbursement.
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If We Cannot Improve Physician Reimbursement And/Or Convince More Private Insurance
Carriers To Adequately Reimburse Physicians For Our Product, Sales May Suffer.
 ® ®
  We Have Only Three Therapies That Have Received Regulatory Approval Or Clearance, And We
Cannot Predict Whether We Will Ever Develop Or Commercialize Any Other Levulan ® Products.
 Our Potential Products Are In Early Stages Of Development And May Never Result In Any
Additional Commercially Successful Products.
 ® ® ®
 
    
    delays in product development, clinical testing or manufacturing,
    
    unplanned expenditures in product development, clinical testing or manufacturing,
    
    failure in clinical trials or failure to receive regulatory approvals,
    
    emergence of superior or equivalent products,
    
    inability to market products due to third-party proprietary rights, and
    
    failure to achieve market acceptance.
 ®
 We Must Receive Separate Approval For Any Drug Or Medical Device Products Before We Can
Sell Them Commercially In The United States Or Abroad.
 ® ® ®
 ®
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Because Of The Nature Of Our Business, The Loss Of Key Members Of Our Management Team
Could Delay Achievement Of Our Goals.
  Collaborations With Outside Scientists May Be Subject To Restriction And Change.
  Risks Related To Our Industry
 Product Liability And Other Claims Against Us May Reduce Demand For Our Products Or Result
In Damages.
 We Are Subject To Risk From Potential Product Liability Lawsuits Which Could Negatively
Affect Our Business.
  Our Business Involves Environmental Risks And We May Incur Significant Costs Complying
With Environmental Laws And Regulations.
  We May Not Be Able To Compete Against Traditional Treatment Methods Or Keep Up With Rapid
Changes In The Biotechnology And Pharmaceutical Industries That Could Make Some Or All Of
Our Products Non-Competitive Or Obsolete.
 Competing Products And Technologies Based On Traditional Treatment Methods May Make Our
Products Or Potential Products Noncompetitive Or Obsolete.
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
    
    price reductions,
    
    lower levels of third-party reimbursements,
    
    failure to achieve market acceptance, and
    
    loss of market share,
   ® ® ® ® ® ® ®
 Our Competitors In The Biotechnology And Pharmaceutical Industries May Have Better
Products, Manufacturing Capabilities Or Marketing Expertise.
 ®
  
    
    the ease of administration of our method of PDT,
    
    the degree of generalized skin sensitivity to light,
    
    the number of required doses,
    
    the selectivity of our drug for the target lesion or tissue of interest, and
    
    the type and cost of our light systems.
 Our primary competition in the acne market includes oral and topical antibiotics, other
topical prescription and over-the-counter products, as well as various laser and non-laser
light treatments. The market is highly competitive and other large and small companies
have more experience than we do which could make it difficult for us to penetrate the
market. The entry of new products from time to time would likely cause us to lose market
share.
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Risks Related To Our Stock
 Our Common Stock May Not Continue To Trade On The Nasdaq Global Market, Which Could Reduce
The Value Of Your Investment And Make Your Shares More Difficult To Sell.
  Our Stock Price Is Highly Volatile And Sudden Changes In The Market Value Of Our Stock
Occur Making An Investment Risky.
  Significant Fluctuations In Orders For Our Products, On A Monthly And Quarterly Basis, Are
Common Based On External Factors And Sales Promotion Activities. These Fluctuations Could
Increase The Volatility Of Our Stock Price.
  Future Sales Of Securities May Cause Our Stock Price To Decline.
  Effecting A Change Of Control Of DUSA Would Be Difficult, Which May Discourage Offers For
Shares Of Our Common Stock.
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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
  
 ITEM 4. REMOVED AND RESERVED.
 
 ITEM 5. OTHER INFORMATION.
  
 ITEM 6. EXHIBITS.
 EXHIBITNO.
    
    DESCRIPTION OF EXHIBIT3(a.1)
    
    Certificate of Incorporation, as amended, filed as Exhibit 3(a) to the Registrants Form 10-K for the fiscal year
ended December 31, 1998, and is incorporated herein by reference.3(a.2)
    
    Certificate of Amendment to the Certificate of Incorporation, as amended, dated October 28, 2002 and filed as Exhibit
99.3 to the Registrants Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2002, filed November
12, 2002, and is incorporated herein by reference.3(b)
    
    By-laws of the Registrant, filed as Exhibit 3.1 to the Registrants current report on Form 8-K, filed on November 2,
2009, and is incorporated herein by reference.31(a)
    
    Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.31(b)
    
    Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.32(a)
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32(b)
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.99.1
    
    Press Release dated November 5, 2010.
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SIGNATURES
  DUSA Pharmaceuticals, Inc.By:
    /s/ Robert F. DomanRobert F. DomanPresident and Chief Executive Officer
(principal executive officer)  By:
    /s/ Richard C. ChristopherRichard C. ChristopherVice President, Finance and Chief Financial Officer
(principal financial officer)  37




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EXHIBIT INDEX
 3(a.1)
    
    Certificate of Incorporation, as amended, filed as Exhibit 3(a) to the Registrants Form 10-K for the fiscal year
ended December 31, 1998, and is incorporated herein by reference.3(a.2)
    
    Certificate of Amendment to the Certificate of Incorporation, as amended, dated October 28, 2002 and filed as Exhibit
99.3 to the Registrants Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2002, filed November
12, 2002, and is incorporated herein by reference.3(b)
    
    By-laws of the Registrant, filed as Exhibit 3.1 to the Registrants current report on Form 8-K, filed on November 2,
2009, and is incorporated herein by reference.31(a)
    
    Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.31(b)
    
    Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.32(a)
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32(b)
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.99.1
    
    Press Release dated November 5, 2010.
 38