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UNITED STATES
    SECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
    20549
      Form 10-K
  ANNUAL REPORT
 PURSUANT TO SECTION 13 OR
    15(d)
 OF THE SECURITIES EXCHANGE ACT
    OF 1934
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2008ORo

TRANSITION REPORT PURSUANT TO
    SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
    1934For the transition period
    from          to   Commission file number:
    000-50767
      CORNERSTONE THERAPEUTICS
    INC.
 (Exact Name of Registrant as
    Specified in Its Charter)
  Delaware

04-3523569(State or Other Jurisdiction
    of

(IRS EmployerIncorporation or
    Organization)

Identification No.)1255 Crescent Green Drive, Suite 250

27518Cary, North Carolina

(Zip Code)(Address of Principal Executive
    Offices)    (919)
    678-6611
        Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, $0.001 par value per share

The NASDAQ Stock Market LLC    None.
      o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer o
    Non-accelerated
    filer o
    Smaller reporting
    company þ (Do not check if a smaller
    reporting company)
  Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE




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##### 





CORNERSTONE
    THERAPEUTICS INC.
  ANNUAL
    REPORT
    ON
    FORM 10-K
    INDEX
   
 PagePART IItem 1.


Business

1Item 1A.


Risk Factors

35Item 1B.


Unresolved Staff Comments

69Item 2.


Properties

69Item 3.


Legal Proceedings

69Item 4.


Submission of Matters to a Vote of Security
    Holders

72EXECUTIVE OFFICERS OF THE REGISTRANT

73NON-EMPLOYEE DIRECTORS OF THE REGISTRANT

75PART IIItem 5.


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities

76Item 6.


Selected Financial Data

76Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations

77Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk

92Item 8.


Financial Statements and Supplementary Data

93Item 9.


Changes in and Disagreements With Accountants on
    Accounting and Financial Disclosure

133Item 9A.


Controls and Procedures

133Item 9A(T).


Controls and Procedures.

133Item 9B.


Other Information

135PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance

136Item 11.


Executive Compensation

136Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters

137Item 13.


Certain Relationships and Related Transactions,
    and Director Independence

137Item 14.


Principal Accountant Fees and Services

137PART IVItem 15.


Exhibits, Financial Statement Schedules

137SIGNATURES

138EXHIBIT INDEXEx-10.68 Form of Incentive Stock Option Agreement granted under 2004 Stock Incentive PlanEx-10.70 Form of Nonstatutory Stock Option Agreement granted under 2004 Stock Incentive PlanEx-10.72 Form of Nonstatutory Stock Option Agreement for a Non-Employee Director granted under the 2004 Stock Incentive PlanEx-10.80 Amended and Restated Non-Employee Director Compensation and Reimbursement Policy of the RegistrantEX-10.81 Agreement Regarding Employment, Employee Duties, Ownership of Employee Developments, and Confidentiality between Cornerstone BioPharma, Inc. and Joshua B. Franklin dated September 12, 2008Ex-10.87 Employment Agreement - Josh FranklinEx-10.93 Restricted Stock Agreement dated as of September 16, 2008 between the Registrant and Scott B. TownsendEx-21.1 Subsidiaries of the RegistrantEx-23.1 Consent of Grant Thornton LLP.Ex-31.1 Section 302 Certification of the Principal Executive OfficerEx-31.2 Section 302 Certification of the Principal Financial OfficerEx-32.1 Section 906 Certification of the Principal Executive OfficerEx-32.2 Section 906 Certification of the Principal Financial Officer




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PART I  Cautionary
    Statement Regarding Forward-Looking Statements
  Form 10-K ® Form 10-K Form 10-K
  ITEM 1.
    BUSINESS  Background
   1




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®
  Overview
    
    In-license or acquire rights to under-promoted,
    patent-protected, branded respiratory pharmaceutical products,
    or late stage product candidates;
    Implement life cycle management strategies to maximize the
    potential value and competitive position of our currently
    marketed products, newly acquired products and product
    candidates that are currently in development;
    Grow product revenue through our specialty sales force which is
    focused on the respiratory market; and
    Maintain and strengthen the intellectual property position of
    our currently marketed products, newly acquired products and our
    product candidates. 2




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Promoted Product Lines

Active Pharmaceutical Ingredient(s)

Primary IndicationSPECTRACEF
    200 mg

Cefditoren

Treatment of mild to moderate infections that are caused by
    susceptible strains of microorganisms in community-acquired
    pneumonia, acute bacterial exacerbation of chronic bronchitis,
    pharyngitis and tonsillitis and uncomplicated skin and
    skin-structure infectionsSPECTRACEF
    400 mg

Cefditoren

Treatment of acute bacterial exacerbation of chronic bronchitis;
    community-acquired pneumoniaZYFLO CR

Zileuton

Prevention and chronic treatment of asthma in adults and
    children 12 years of age or olderALLERX 10 Dose 
    Pack/ ALLERX 30 
    Dose Pack

AM dose:
    Pseudoephedrine and methscopolamine PM dose: 
    Phenylephrine, chlorpheniramine and methscopolamine

Temporary relief of symptoms associated with allergic rhinitisALLERX Dose 
    Pack DF

AM dose: 
    Chlorpheniramine and methscopolamine PM dose: 
    Chlorpheniramine and methscopolamine

Temporary relief of symptoms associated with allergic rhinitisALLERX Dose 
    Pack PE

AM dose:
    Phenylephrine and methscopolamine PM dose: 
    Phenylephrine, chlorpheniramine and methscopolamine

Temporary relief of symptoms associated with allergic rhinitis   ®
  ®
  Our
    Promoted Products
  ®
 3




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##### Table of Contents



SPECTRACEF
  Overview.
  Market Opportunity and Other Treatment
    Options. ® ® ® ® ® ® ® ®
      Benefits of SPECTRACEF. Streptococcus pneumoniae Haemophilus
    influenzae Moraxella catarrhalis Streptococcus
    pneumoniae Haemophilus influenzae Moraxella
    catarrhalis
 4




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Proprietary Rights.
  ZYFLO
    CR
  Overview.
    Market Opportunity and Other Treatment
    Options.
  ® ® ® ® ® ®
    Benefits of ZYFLO CR.
   5




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
    rapid and sustained improvement for patients over a six-month
    period in objective and subjective measures of asthma control;
    reduction of exacerbations and need for either bronchodilatory
    or steroid rescue medications; and
    acute bronchodilatory effect within two hours after the first
    dose.        
    In a three-month pivotal efficacy trial, in which
    397 patients received either ZYFLO CR or placebo, patients
    taking ZYFLO CR demonstrated statistically significant
    improvements over placebo in objective measures of asthma
    control. In the trial, patients taking ZYFLO CR showed a reduced
    need for bronchodilatory drugs as a rescue medication to
    alleviate uncontrolled symptoms. In this trial, 2.5% of the
    patients taking ZYFLO CR experienced ALT levels greater than or
    equal to three times the level normally seen in the bloodstream,
    compared to 0.5% of the patients taking placebo.
    In a six-month safety trial, in which 706 patients received
    either a combination of ZYFLO CR and their usual asthma
    medications or a combination of placebo and their usual asthma
    medications, 1.78% of the patients taking ZYFLO CR and their
    usual asthma medications experienced ALT levels greater than or
    equal to three times the level normally seen in the bloodstream,
    compared to 0.65% of the patients taking placebo and their usual
    asthma medications.    Proprietary
    Rights.
   6




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ALLERX
    DOSE PACKS
  Overview.
  Form 10-K Form 10-K.
  Market Opportunity.
    ® ® ® ®
  Benefits and Description of ALLERX Dose
    Packs.
    ALLERX 10 Dose Pack/ALLERX 30 Dose Pack. 10-day 30-day
  ALLERX Dose Pack DF/ALLERX Dose Pack DF
    30. 10-day 30-day
 7




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ALLERX Dose Pack PE/ALLERX Dose Pack PE
    30. 10-day 30-day
  Proprietary Rights. , Form 10-K.
    Other
    Products
    HYOMAX
  Overview. ® Form 10-K Form 10-K.
  Market Opportunity and Other Treatment
    Options.
 8




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® ® ® ® ® ® ® ® ®
  Benefits of HYOMAX. ®
  Proprietary Rights.
  PROPOXYPHENE/ACETAMINOPHEN
    PRODUCTS
    BALACET 325.
  APAP 325.
  APAP 500. ®
   9




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##### Table of Contents



Form 10-K.
  Product
    Development Pipeline
    Method ofProduct Candidate

Regulatory Status

Therapeutic Class

Administration

Primary Indication(s)Spectracef Line ExtensionsSPECTRACEF Once Daily

sNDA submission targeted in 2011

Antibiotic

Oral tablet Once-daily Dosing

Acute bacterial exacerbations of chronic bronchitis with COPDSPECTRACEF Suspension

NDA submission targeted in 2011

Antibiotic

Oral suspension

Pharyngitis and tonsillitis; acute otitis mediaOther Product CandidatesCRTX 058

NDA submission targeted in 2011

Anticholinergic and antihistamine combination

Oral tablet

Temporary relief of symptoms associated with allergic rhinitisCRTX 067

Regulatory submission targeted in 2009

Antitussive and antihistamine combination

Oral suspension

Temporary relief of symptoms associated with cough and upper
    respiratory symptoms associated with allergies or a coldCRTX 069

Regulatory submission targeted in 2009

Antitussive and antihistamine combination

Oral suspension

Temporary relief of symptoms associated with cough and upper
    respiratory symptoms associated with allergies or a cold     SPECTRACEF
    Line Extensions
  Overview.
  SPECTRACEF Once Daily.
 10




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SPECTRACEF Suspension. Streptococcus pyogenes Streptococcus
    pyogenes
    Proprietary Rights.
  Other
    Product Candidates
  Anticholinergic
    and Antihistamine Combination Product Candidate  CRTX
    058
  Overview and Development Status.
  Market Opportunity and Current Treatment
    Options.
 11




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® ® ® ® ®
  Benefits of CRTX 058.
    Proprietary Rights. ®
  Antitussive
    and Antihistamine Combination Product Candidates 
    CRTX 067 and CRTX 069
  Overview and Development Status.
  Market Opportunity and Current Treatment
    Options.
 12




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##### Table of Contents



Benefits of CRTX 067 and CRTX 069.
  Proprietary Rights. ® 12-hour
  Other
    Technology Assets
    
    the development of a small molecule product candidate targeting
    the alpha-7 receptor;
    the development of an injectable form of zileuton initially for
    use in emergency room or urgent care centers for patients who
    suffer acute exacerbations of asthma;
    the examination of the pharmacokinetic and pharmacodynamic
    profile of the R(+) isomer of zileuton to determine if there are
    potential dosing improvements for patients from this
    isomer; and
    the development, in collaboration with MedImmune, Inc., or
    MedImmune, a subsidiary of AstraZeneca PLC, of monoclonal
    antibodies directed toward a cytokine called HMGB1, which we
    believe may be an important target for the development of
    products to treat diseases mediated by the bodys
    inflammatory response.  Alpha-7
    Program
     13




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Zileuton
    Injection
      R(+)
    Isomer of Zileuton
      HMGB1
    Program
       14




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Sales and
    Marketing; Co-promotion Agreements
  Sales
    and Marketing
          Co-promotion
    Agreements
    DEY  Co-Promotion Agreement for ZYFLO
    CR.
   15




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Co-promotion Agreement with Atley
    Pharmaceuticals.
    60-days
  Trade,
    Distribution and Reimbursement
  Trade
    Sales and Distribution
   16




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##### Table of Contents



Customer

2008


2007Cardinal Health


40
%


43
%McKesson Corporation


31
%


34
%AmerisourceBergen Corporation


15
%


14
%         Reimbursement
    Manufacturing
     17




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##### Table of Contents



Product

Manufacturer/PackagerSPECTRACEFAPI (cefditoren pivoxil)

Meiji200 mg tablets

Meiji400 mg tablets

MeijiSPECTRACEF packaging

MeijiZYFLO/ZYFLO CRAPI (zileuton)

ShasunZYFLO tablets

PatheonZYFLO CR tablet cores

JagotecZYFLO CR tablet coating and packaging

PatheonALLERXBulk tablets for Dose Pack family of products

SovereignALLERX Packaging

Legacy, Carton ServicesBALACET 325, APAP 500 and APAP 325

VintageHYOMAX

Sovereign         ZYFLO
    CR Supply Chain Issues
   18




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Meiji 
    SPECTRACEF License and Supply Agreement
  Form 10-K.
  Shasun 
    Agreement for Manufacturing and Supply of Zileuton
    API
  18-months
  Jagotec 
    Manufacture and Supply Agreement for ZYFLO CR
  12-month 24-months 36-months
  Patheon Manufacturing
    Services Agreement for ZYFLO CR
  18-months
  Patheon Commercial
    Manufacturing Agreement ZYFLO Immediate Release
    Tablets
  one-year 12-months 18-months
  Vintage 
    Manufacturing Agreement for BALACET 325, APAP 325 and APAP
    500
    Sovereign
    Pharmaceuticals, Ltd.  Manufacturing of HYOMAX
    Product Line
   19




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Intellectual
    Property
    Patents
      Patents 
  Number

Issued Patents

Product(s)

ExpirationLicensed Patents4,839,350

Cephalosporin compounds and the production thereof

SPECTRACEF

04/07/20094,873,259

Indole, Benzofuran, Benzothiophene Containing Lipoxygenase
    Inhibiting Compounds

ZYFLO CR and ZYFLO

12/10/20105,422,123

Tablets with controlled-rate release of active substances

ZYFLO CR

06/06/20125,958,915

Antibacterial composition for oral administration

SPECTRACEF

10/14/20166,270,796

Antihistamine/ decongestant regimens for treating rhinitis

ALLERX Dose Pack(1)

10/29/20176,843,372

Antihistamine/ decongestant regimens for treating rhinitis

ALLERX Dose Pack PE, 
    ALLERX 10 Dose Pack, 
    ALLERX 30 Dose Pack

05/04/2021   Patent
    Applications 
  Number

Pending Patents

Product

Expiration20040115272

Amorphous cefditoren pivoxil composition and process for
    producing the same

SPECTRACEF

04/26/202220080015241

All day rhinitic condition treatment regimen

ALLERX Dose Pack DF

07/13/202620080185313

Medicament regimen for treating bronchitis or lower respiratory
    tract condition

None

02/05/202720080311196

All day rhinitic condition treatment regimen

ALLERX Dose Pack DF

07/13/2026  20




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(1)
    
    AlleRx Dose Pack was reformulated in March 2008 and is currently
    marketed under Patent No. 6,843,372          Trade
    Secrets
    Trademarks
  ®
 21




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License
    and Collaboration Agreements
    Meiji 
    SPECTRACEF License and Supply Agreement
  Overview.
  Fees, Milestones and Royalties.
  Exclusive Supplier and Minimum Purchase
    Obligation.
  Term and Termination. product-by-product product-by-product 270-days
  Joint Product Development.
 22




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Abbott 
    Zileuton License Agreements
  Overview. ®
  Fees and Royalty Payments. country-by-country
  Term and Termination. 60-days
  Jagotec 
    Consent to Abbott Sublicense of Zileuton
    Pharmaceutical
    Innovations  ALLERX 372 Patent License
    Agreement
  Overview.
 23




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Form 10-K.
  Royalties.
  Term and Termination.
  Neos 
    Development, License and Services Agreement 
    Anticholinergic and Antihistamine Combination
    Product
  Overview.
  Fees, Milestones and Royalties.
  Term and Termination. 90-days
 24




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Neos
    and Coating Place  Development and Manufacturing
    Agreement  Antitussive and Antihistamine Combination
    Products
  Overview.
  Fees, Milestones and Profit Sharing.
  Product Development, Regulatory and Commercialization
    Expenses.
  Exclusivity.
  Term and Termination.
  Neos 
    Products Development Agreement
  Overview.
  Fees, Milestones and Royalties.
  Term and Termination.
 25




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Sovereign 
    Supply and Marketing Agreement for Sovereigns Hyoscyamine
    Products
    Vintage 
    Asset Purchase Agreement Propoxyphene/Acetaminophen
    Products
    The
    Feinstein Institute  HMGB1 License Agreement and
    Alpha-7 License Agreement
  Overview.
  Fees and Royalty Payments Under License
    Agreement.
  Related Sponsored Research Agreements.
  Fees and Royalty Payments Under Sponsored Research
    Agreements.
 26




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##### Table of Contents



MedImmune 
    License and Collaboration Agreement  HMGB1
    Pharmaceuticals
  Overview.
    Milestones and Royalties. product-by-product country-by-country
  Term and Termination.
  Beckman
    Coulter  License Agreement  HMGB1
    Diagnostic Products
  Overview.
  Milestones and Royalties.
  Term and Termination. 90-days
 27




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##### Table of Contents



SetPoint 
    Vagus Nerve Technology License
  Overview.
  
    amounts payable to The Feinstein Institute in connection with
    the filing of any U.S. patent application or issuance of a
    U.S. patent relating to the field of cholinergic
    anti-inflammatory technology; and
    minimum annual royalties payable to The Feinstein Institute
    beginning in the first year after termination of research
    activities under the sponsored research agreement.  Milestones and Royalties.
  Term and Termination. 90-days
  Competition
    Form 10-K.
   28




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##### Table of Contents



Marketed
    Products
  Form 10-K.
  Product
    Candidates
  Form 10-K.
  Regulatory
    Matters
  and/or
  FDA
    Regulation of Drug Products
   29




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##### Table of Contents



New Drug Applications.
  
    pre-clinical laboratory tests, animal studies and formulation
    studies;
    submission to the FDA of an investigational new drug exemption,
    or IND, for human clinical testing, which must become effective
    before human clinical trials may begin;
    adequate and well-controlled clinical trials to establish the
    safety and efficacy of the drug for each indication;
    submission to the FDA of an NDA;
    satisfactory completion of an the FDA inspection of the
    manufacturing facility or facilities at which the drug is
    produced to assess compliance with cGMP; and
    FDA review and approval of the NDA.       30




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Supplemental New Drug Applications.
        Abbreviated New Drug Applications.
  and/or 18-month
 31




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Section 505(b)(2) New Drug
    Applications.
  and/or
  Foreign
    Regulation
    Regulation
    of Controlled Substances
     32




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Hazardous
    Materials
    Pharmaceutical
    Pricing and Reimbursement
        
    controls on government funded reimbursement for drugs;
    controls on payments to health care providers that affect demand
    for drug products;
    challenges to the pricing of drugs or limits or prohibitions on
    reimbursement for specific products through other means;
    weakening of restrictions on imports of drugs; and
    expansion of the use of managed care systems in which health
    care providers contract to provide comprehensive health care for
    a fixed cost per person.   33




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##### Table of Contents



Fraud and
    Abuse Regulation
    
    Federal Anti-Kickback Law.  The anti-kickback
    law contained in the federal Social Security Act is a criminal
    statute that makes it a felony for individuals or entities
    knowingly and willfully to offer or pay, or to solicit or
    receive, direct or indirect remuneration, in order to induce the
    purchase, order, lease, or recommending of items or services, or
    the referral of patients for services, that are reimbursed under
    a federal health care program, including Medicare and Medicaid.
    The term remuneration has been interpreted broadly
    and includes both direct and indirect compensation and other
    items and services of value. Both the party offering or paying
    remuneration and the recipient may be found to have violated the
    statute. Courts have interpreted the anti-kickback law to cover
    any arrangement where one purpose of the remuneration is to
    induce purchases or referrals, regardless of whether there are
    also legitimate purposes for the arrangement. There are narrow
    exemptions and regulatory safe harbors, but many legitimate
    transactions fall outside of the scope of any exemption or safe
    harbor, although that does not necessarily mean the arrangement
    will be subject to penalties under the anti-kickback statute.
    Penalties for federal anti-kickback violations are severe,
    including up to five years imprisonment, individual and
    corporate criminal fines, exclusion from participation in
    federal health care programs and civil monetary penalties in the
    form of treble damages plus $50,000 for each violation of the
    statute. 34




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##### Table of Contents




    State Laws.  Various states have enacted laws
    and regulations comparable to the federal fraud and abuse laws
    and regulations. These state laws and regulations may apply to
    items or services reimbursed by any third-party payor, including
    private, commercial insurers and other payors. Moreover, these
    laws and regulations vary significantly from state to state and,
    in some cases, are broader than the federal laws and
    regulations. These differences increase the costs of compliance
    and the risk that the same arrangements may be subject to
    different compliance standards in different states.  Employees
    Available
    Information
  Form 10-K, Form 10-Q, Form 8-K
  ITEM 1A.
    RISK
    FACTORS  Form 10-K
  Risks
    Relating to Commercialization and Product Acquisitions
  We
    expect to derive substantially all of our revenues from sales of
    the SPECTRACEF products, ZYFLO CR, the ALLERX Dose Pack
    products, the HYOMAX line of products and the
    propoxyphene/acetaminophen products.
    The
    commercial success of our currently marketed products and any
    additional products that we successfully develop depends on the
    degree of market acceptance by physicians, patients, health care
    payors and others in the medical community.
    
    the prevalence and severity of the products side effects;
    the efficacy and potential advantages of the products over
    alternative treatments; 35




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##### Table of Contents




    the ability to offer the products for sale at competitive
    prices, including in relation to any generic or re-imported
    products or competing treatments;
    the relative convenience and ease of administration of the
    products;
    the willingness of the target patient population to try new
    therapies and of physicians to prescribe these therapies;
    the perception by physicians and other members of the health
    care community of the safety and efficacy of the products and
    competing products;
    the availability and level of third-party reimbursement for
    sales of the products;
    the continued availability of adequate supplies of the products
    to meet demand;
    the strength of marketing and distribution support;
    any unfavorable publicity concerning us, our products or the
    markets for these products, such as information concerning
    product contamination or other safety issues in the markets for
    our products, whether or not directly involving our products;
    regulatory developments related to our marketing and promotional
    practices or the manufacture or continued use of our
    products; and
    changes in intellectual property protection available for the
    products or competing treatments.          Concerns
    regarding the safety profile of ZYFLO CR and ZYFLO may limit
    market acceptance of ZYFLO CR.
   36




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Concerns
    regarding the potential toxicity and addictiveness of
    propoxyphene and the known liver toxicity of acetaminophen may
    limit market acceptance of our propoxyphene/acetaminophen
    products or cause the FDA to remove these products from the
    market.
  14-to-12
    Our
    strategy of obtaining, through product acquisitions and
    in-licenses, rights to products and product candidates for our
    development pipeline and to proprietary drug delivery and
    formulation technologies for our life cycle management of
    current products may not be successful.
     37




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##### Table of Contents




    We may be unable to license or acquire the relevant products,
    product candidates or technologies on terms that would allow us
    to make an appropriate return on investment;
    Companies that perceive us as a competitor may be unwilling to
    license or sell their product rights or technologies to us;
    We may be unable to identify suitable products, product
    candidates or technologies within our areas of
    expertise; and
    We may have inadequate cash resources or may be unable to obtain
    financing to acquire rights to suitable products, product
    candidates or technologies from third parties.    If we
    are unable to attract, hire and retain qualified sales and
    marketing personnel, the commercial opportunity for our products
    and product candidates may be diminished.
    We
    face competition, which may result in others discovering,
    developing or commercializing products before or more
    successfully than us.
     38




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
    The SPECTRACEF products and SPECTRACEF Once Daily  second and third generation cephalosporins,
    such as Cedax, Suprax and generic formulations of Omnicef and
    Ceftin; macrolides, such as generic formulations of Zithromax
    and Biaxin; and quinolones, such as Levaquin and generic
    formulations of Cipro.
    SPECTRACEF Suspension Suprax and generic
    formulations of Omnicef and Ceftin.
    ZYFLO CR and ZYFLO bronchodilatory drugs,
    such as ProAir HFA Inhalation Aerosol and Proventil HFA
    Inhalation Aerosol; LTRAs, such as Singulair; inhaled
    corticosteroids, such as Flovent; and combination products, such
    as Advair Diskus and Symbicort. In addition, we may face
    competition from pharmaceutical companies seeking to develop new
    drugs for the asthma market.
    ALLERX and RESPIVENT Dose Pack Products 
    prescription products, including first generation antihistamine
    and antihistamine combination products, such as Rescon and
    Dallergy, and over-the-counter products, such as Benadryl and
    Chlor-Trimeton.
    HYOMAX Products belladonna and derivative
    antispasmodics, such as the generic formulations of Levsin,
    Levbid and Donnatal; urinary incontinence antispasmodics, such
    as Detrol LA, VESIcare and the generic formulations of Ditropan
    and Ditropan XL; and synthetic gastrointestinal antispasmodics,
    such as the generic formulations of Bentyl and Pamine. 39




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
    BALACET 325, APAP 325 and APAP 500 generic
    formulations of propoxyphene and acetaminophen, the APIs in
    BALACET 325, APAP 325 and APAP 500, and many other drugs on the
    market or in development for the treatment of mild to moderate
    pain.
    Anticholinergic and Antihistamine Combination Product
    Candidates second generation antihistamines,
    such as Allegra; third generation antihistamines, such as Xyzal
    and Clarinex; first generation antihistamine and antihistamine
    combination products, most of which are generic formulations;
    and over-the-counter antihistamines, such as Claritin, Zyrtec,
    Benadryl and Chlor-Trimeton.
    Antitussive and Antihistamine Combination Product Candidates various narcotic and non-narcotic antitussives,
    such as King Pharmaceuticals, Inc.s
    Tussigon®

    (hydrocodone and homatropine), Mallinckrodt Brand
    Pharmaceuticals, Inc.s
    TussiCaps®

    (hydrocodone polistirex and chlorpheniramine polistirex), UCB,
    Inc.s
    Tussionex®

    (hydrocodone polistirex and chlorpheniramine polistirex) and
    generic formulations of Wyeths
    Phenergan®

    with codeine (codeine and promethazine); over-the-counter
    antitussives, such as Reckitt Benckiser Inc.s
    Delsym®

    (dextromethorphan polistirex), Schering-Plough
    Corporations Coricidin
    HBP®

    Cough & Cold (dextromethorphan and chlorpheniramine);
    and prescription antitussives, such as Sciele Pharma,
    Inc.s
    Rondec®

    DM Syrup (dextromethorphan, phenylephrine and chlorpheniramine)
    and Meda Pharmaceuticals Inc.s
    Tussi-12D®

    (carbetapentane, pyrilamine and phenylephrine).      As our
    competitors introduce their own generic equivalents of our
    generic products, our net revenues from such products are
    expected to decline.
   40




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If we
    fail to manage successfully our product acquisitions, our
    ability to develop our product candidates and expand our product
    pipeline may be harmed.
    
    the overuse of cash resources;
    higher than anticipated acquisition costs and expenses;
    potentially dilutive issuances of equity securities;
    the incurrence of debt and contingent liabilities, impairment
    losses
    and/or
    restructuring charges;
    the assumption of or exposure to unknown liabilities;
    the development and integration of new products that could
    disrupt our business and occupy our managements time and
    attention;
    the inability to preserve key suppliers or distributors of any
    acquired products; and
    the acquisition of products that could substantially increase
    our amortization expenses.    A
    failure to maintain optimal inventory levels could harm our
    reputation and subject us to financial losses.
  five-year
  12-month
 41




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If our
    third-party manufacturers and packagers do not obtain the
    necessary quota for controlled substances needed to supply us
    with our products or the quotas are not sufficient, we may be
    unable to meet commercial demand for the products.
    If we
    or our contract manufacturers fail to comply with regulatory
    requirements for our controlled substance products and product
    candidates, the DEA may take regulatory actions detrimental to
    our business, resulting in temporary or permanent interruption
    of distribution, withdrawal of products from the market or other
    penalties.
   42




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Product
    liability lawsuits against us could cause us to incur
    substantial liabilities and to limit commercialization of any
    products that we may develop.
    
    decreased demand for our products or any products that we may
    develop;
    injury to our reputation;
    the withdrawal of clinical trial participants;
    the withdrawal of a product from the market;
    costs to defend the related litigation;
    substantial monetary awards to clinical trial participants or
    patients;
    diversion of management time and attention;
    loss of revenue; and
    inability to commercialize the products that we may develop.      Risks
    Relating to Product Development and Regulatory Matters
  If we
    are unable to develop safe and efficacious formulations of our
    product candidates, or our clinical trials for the SPECTRACEF
    Suspension line extension or our other product candidates are
    not successful, we may not be able to develop, obtain regulatory
    approval for and commercialize these product candidates
    successfully.
   43




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If
    clinical trials for our product candidates are delayed, we would
    be unable to obtain regulatory approval and commercialize our
    product candidates on a timely basis, which would require us to
    incur additional costs and delay the receipt of any revenues
    from product sales.
      
    we or FDA, a third party assisting us with product development
    or an IRB suspending or stopping a clinical trial;
    discussions with the FDA regarding the scope or design of our
    clinical trials;
    delay in obtaining, or the inability to obtain, required
    approvals from regulators, IRBs or other governing entities at
    clinical sites selected for participation in our clinical trials; 44




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
    the number of patients required for our clinical trials may be
    larger than we anticipate, enrollment in our clinical trials may
    be slower than we anticipate or participants may drop out of our
    clinical trials at a higher rate than we anticipate;
    our clinical trials may produce negative or inconclusive
    results, and we may decide, or regulators may require us, to
    conduct additional clinical trials, or we may abandon projects
    that had appeared to be promising;
    our third-party contractors may fail to comply with regulatory
    requirements or meet their contractual obligations in a timely
    manner;
    insufficient supply or deficient quality of product candidate
    materials or other materials necessary to conduct clinical
    trials;
    unfavorable FDA inspection and review of a clinical trial site
    or records of any clinical investigation;
    serious and unexpected drug-related side effects experienced by
    participants in past clinical trials for the same or a different
    indication; or
    exposure of participants to unacceptable health risks.            If our
    clinical trials do not demonstrate safety and efficacy in
    humans, we may experience delays, incur additional costs and
    ultimately be unable to commercialize our product
    candidates.
   45




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
    be delayed in obtaining marketing approval for product
    candidates;
    not be able to obtain marketing approval;
    obtain approval for indications that are not as broad as
    intended; or
    have the product removed from the market after obtaining
    marketing approval.    If we
    are not able to obtain required regulatory approvals, we will
    not be able to commercialize our product candidates, and our
    ability to generate revenue will be materially
    impaired.
    Our
    limited experience in obtaining regulatory approvals could
    delay, limit or prevent such approvals for our product
    candidates.
   46




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Some
    of our specialty pharmaceutical products are now being marketed
    without approved NDAs or ANDAs.
       47




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Our
    sales depend on payment and reimbursement from third-party
    payors, and a reduction in the payment rate or reimbursement
    could result in decreased use or sales of our
    products.
           48




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If we
    fail to comply with regulatory requirements for our products or
    if we experience unanticipated problems with them, the FDA may
    take regulatory actions detrimental to our business, resulting
    in temporary or permanent interruption of distribution,
    withdrawal of products from the market or other
    penalties.
      
    withdrawal of the products from the market;
    restrictions on the marketing or distribution of such products;
    restrictions on the manufacturers or manufacturing processes;
    warning letters;
    refusal to approve pending applications or supplements to
    approved applications that we submit;
    recalls;
    fines;
    suspension or withdrawal of regulatory approvals;
    refusal to permit the import or export of our products;
    product seizures; or
    injunctions or the imposition of civil or criminal penalties.    State
    and federal pharmaceutical marketing and promotional compliance
    and reporting requirements may expose us to regulatory and legal
    action by government authorities.
   49




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We may
    be subject to investigations or other inquiries concerning our
    compliance with reporting obligations under federal health care
    program pharmaceutical pricing requirements.
    Our
    corporate compliance and corporate governance programs cannot
    guarantee that we are in compliance with all potentially
    applicable regulations.
    We
    will spend considerable time and money complying with federal
    and state laws and regulations, and, if we are unable to fully
    comply with such laws and regulations, we could face substantial
    penalties.
    
    The federal anti-kickback statute is a criminal statute that
    makes it a felony for individuals or entities knowingly and
    willfully to offer or pay, or to solicit or receive, direct or
    indirect remuneration, in order to induce the purchase, order,
    lease, or recommending of items or services, or the referral of
    patients 50




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for services, that are reimbursed under a federal health care
    program, including Medicare and Medicaid;  
    The federal False Claims Act imposes liability on any person who
    knowingly submits, or causes another person or entity to submit,
    a false claim for payment of government funds. Penalties include
    three times the governments damages plus civil penalties
    of $5,500 to $11,000 per false claim. In addition, the False
    Claims Act permits a person with knowledge of fraud, referred to
    as a qui tamplaintiff, to file a lawsuit on behalf of
    the government against the person or business that committed the
    fraud, and, if the action is successful, the qui tamplaintiff is rewarded with a percentage of the recovery;
    HIPAA imposes obligations, including mandatory contractual
    terms, with respect to safeguarding the privacy, security and
    transmission of individually identifiable health information;
    The Social Security Act contains numerous provisions allowing
    the imposition of a civil money penalty, a monetary assessment,
    exclusion from the Medicare and Medicaid programs, or some
    combination of these penalties; and
    Many states have analogous state laws and regulations, such as
    state anti-kickback and false claims laws. In some cases, these
    state laws impose more strict requirements than the federal
    laws. Some state laws also require pharmaceutical companies to
    comply with certain price reporting and other compliance
    requirements.        Recent
    proposed legislation may permit re-importation of drugs from
    foreign countries into the United States, including foreign
    countries where the drugs are sold at lower prices than in the
    United States, which could force us to lower the prices of
    our products and impair our ability to derive revenue from our
    products.
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Risks
    Relating to Our Dependence on Third Parties
  We use
    third parties to manufacture all of our products and product
    candidates. This may increase the risk that we will not have
    sufficient quantities of our products or product candidates at
    an acceptable cost, which could result in clinical development
    and commercialization of product candidates being delayed,
    prevented or impaired.
      2-ABT, 2-ABT, 2-ABT 2-ABT
      
    We may not be able to meet commercial demands for our products;
    We may be required to cease distribution or issue recalls;
    We may not be able to initiate or continue clinical trials of
    product candidates that are under development; and
    We may be delayed in submitting applications for regulatory
    approvals for product candidates.   52




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We
    rely on third-party manufacturers for compliance with applicable
    regulatory requirements. This may increase the risk of sanctions
    being imposed on us or on a manufacturer of our products or
    product candidates, which could result in our inability to
    obtain sufficient quantities of these products or product
    candidates.
   53




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
    fines;
    injunctions;
    civil penalties;
    the failure of regulatory authorities to grant marketing
    approval of our product candidates;
    delays, suspension or withdrawal of approvals;
    suspension of manufacturing operations;
    license revocation;
    seizures or recalls of products or product candidates;
    operating restrictions; and
    criminal prosecutions.    Difficulties
    relating to the supply chain for ZYFLO CR tablets could
    significantly inhibit our ability to meet, or prevent us from
    meeting, commercial demand for the product.
    We
    rely on third parties to conduct our clinical trials, and those
    third parties may not perform satisfactorily, including failing
    to meet established deadlines for the completion of such
    trials.
   54




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We
    rely on third parties to market and promote some products, and
    these third parties may not successfully commercialize these
    products.
         55




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The
    concentration of our product sales to only a few wholesale
    distributors increases the risk that we will not be able to
    effectively distribute our products if we need to replace any of
    these customers, which would cause our sales to
    decline.
      Our
    business could suffer as a result of a failure to manage and
    maintain our distribution network.
        If any
    of the third parties that we rely upon for assistance in
    researching, developing, manufacturing, promoting and
    distributing our products and product candidates defaults on or
    is unable to refinance at maturity its third party indebtedness,
    our operating performance would be adversely
    affected.
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We
    depend on MedImmune and Beckman Coulter and expect to depend on
    additional collaborators in the future for a portion of our
    revenues and to develop, conduct clinical trials with, obtain
    regulatory approvals for, and manufacture, market and sell some
    of our product candidates. These collaborations may not be
    successful.
          90-days
    
    Collaborators may be pursuing alternative technologies or
    developing alternative products, either on their own or in
    collaboration with others, that may be competitive with the
    product on which they are collaborating with us or that could
    affect our collaborators commitment to us;
    Reductions in marketing or sales efforts or a discontinuation of
    marketing or sales of our products by our collaborators would
    reduce our revenues, which we expect will be based on a
    percentage of net sales by collaborators;
    Collaborators may terminate their collaborations with us, which
    could make it difficult for us to attract new collaborators or
    adversely affect how we are perceived in the business and
    financial communities; 57




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
    Collaborators may not devote sufficient time and resources to
    any collaboration with us, which could prevent us from realizing
    the potential commercial benefits of that collaboration; and
    Collaborators may pursue higher priority programs or change the
    focus of their development programs, which could affect their
    commitments to us.    Risks
    Relating to Intellectual Property and Licenses
  If we
    are unable to obtain and maintain protection for the
    intellectual property relating to our technology and products,
    the value of our technology and products will be adversely
    affected.
     58




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The
    composition of matter patent for the API in SPECTRACEF and in
    the SPECTRACEF line extension product candidates will expire in
    April 2009, and the composition of matter patent for the API in
    ZYFLO CR and ZYFLO will expire in December 2010 and none of our
    other current products or current product candidates have, or
    will have, composition of matter patent
    protection.
      Trademark
    protection of our products may not provide us with a meaningful
    competitive advantage.
   59




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® ®
  If we
    fail to comply with our obligations in our intellectual property
    licenses with third parties, we could lose license rights that
    are important to our business.
      If we
    are unable to protect the confidentiality of our proprietary
    information and know-how, the value of our technology and
    products could be adversely affected.
   60




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If we
    infringe or are alleged to infringe intellectual property rights
    of third parties, our business will be adversely
    affected.
        and/or
 61




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Risks
    Relating to Financial Results
  We may
    need additional funding and may be unable to raise capital when
    needed, which could force us to delay, reduce or eliminate our
    product development or commercialization efforts.
        
    the level of product sales from our currently marketed products
    and any additional products that we may market in the future;
    the scope, progress, results and costs of development activities
    for our current product candidates;
    the costs, timing and outcome of regulatory review of our
    product candidates;
    the number of, and development requirements for, additional
    product candidates that we pursue;
    the costs of commercialization activities, including product
    marketing, sales and distribution;
    the costs and timing of establishing manufacturing and supply
    arrangements for clinical and commercial supplies of our product
    candidates and products;
    the extent to which we acquire or invest in products, businesses
    and technologies;
    the extent to which we chooses to establish collaboration,
    co-promotion, distribution or other similar arrangements for our
    marketed products and product candidates; and
    the costs of preparing, filing and prosecuting patent
    applications and maintaining, enforcing and defending claims
    related to intellectual property owned by or licensed to us.  The
    terms of any additional capital funding that we require may not
    be favorable to us or our stockholders.
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We
    have incurred significant losses and may incur losses in the
    future.
    
    establishing a sales and marketing infrastructure;
    acquiring marketed products, product candidates and related
    technologies;
    commercializing marketed products; and
    developing product candidates, including conducting clinical
    trials.    
    seek FDA approval for the SPECTRACEF line extensions;
    advance the development of other product candidates, including
    our anticholinergic and antihistamine combination product
    candidate and antitussive and antihistamine combination product
    candidates;
    seek regulatory approvals for product candidates that
    successfully complete clinical testing; and
    expand our sales force and marketing capabilities to prepare for
    the commercial launch of future products, subject to FDA
    approval.      
    successfully completing clinical trials of our product
    candidates;
    obtaining and maintaining regulatory approval for these product
    candidates; and
    manufacturing, marketing and selling those products for which we
    may obtain regulatory approval.    If the
    estimates that we make, or the assumptions upon which we rely,
    in preparing our financial statements prove inaccurate, the
    actual results may vary from those reflected in our
    projections.
  product-by-product
 63




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Our
    short operating history may make it difficult for you to
    evaluate the success of our business to date and to assess our
    future viability.
    Our
    operating results are likely to fluctuate from period to
    period.
    
    new product launches, which could increase revenues but also
    increase sales and marketing expenses;
    acquisition activity;
    one-time charges, such as for inventory expiration or product
    quality issues;
    increases in research and development expenses resulting from
    the acquisition of a product candidate that requires significant
    additional development;
    changes in the competitive, regulatory or reimbursement
    environment, which could decrease revenues or increase sales and
    marketing, product development or compliance costs;
    unexpected product liability or intellectual property claims and
    lawsuits;
    significant payments, such as milestones, required under
    collaboration, licensing and development agreements before the
    related product candidate has received FDA approval;
    marketing exclusivity, if any, which may be obtained on certain
    new products;
    the dependence on a small number of products for a significant
    portion of net revenues and net income; and
    price erosion and customer consolidation.   64




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Risks
    Relating to Employee Matters and Managing Growth
  If we
    fail to attract and retain key personnel, or to retain our
    executive management team, we may be unable to successfully
    develop or commercialize our products.
        We
    identified a material weakness in our internal control over
    financial reporting as of December 31, 2008 that has not yet
    been effectively remediated. If we fail to achieve and maintain
    effective internal control over financial reporting and
    disclosure controls and procedures, we could face difficulties
    in preparing timely and accurate financial statements and
    periodic reports, which could result in a loss of investor
    confidence in the information that we report and a decline in
    our stock price, and could impair our ability to raise
    additional funds to the extent needed to meet our future capital
    requirements.
   65




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Our
    management will be required to devote substantial time to comply
    with public company regulations.
        Risks
    Relating to Common Stock
  Our
    stock price is subject to fluctuation, which may cause an
    investment in our stock to suffer a decline in
    value.
      
    the results of current and any future clinical trials; 66




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
    the entry into, or termination of, key agreements, including key
    strategic alliance agreements;
    the results and timing of regulatory reviews relating to the
    approval of product candidates;
    the initiation of material developments in or conclusion of
    litigation to enforce or defend any of our intellectual property
    rights;
    failure of any product candidates, if approved, to achieve
    commercial success;
    general and industry-specific economic conditions that may
    affect research and development expenditures;
    the results of clinical trials conducted by others on products
    that would compete with our product candidates;
    issues in manufacturing our product candidates or any approved
    products;
    the loss of key employees;
    the introduction of technological innovations or new commercial
    products by our competitors;
    changes in estimates or recommendations by securities analysts,
    if any, who cover our common stock;
    future sales of our common stock;
    changes in the structure of health care payment systems; and
    period-to-period fluctuations in our financial results.    If we
    fail to continue to meet all applicable continued listing
    requirements of The NASDAQ Capital Market and NASDAQ determines
    to delist our common stock, the market liquidity and market
    price of our common stock could decline.
    If our
    quarterly results of operations fluctuate, this fluctuation may
    subject our stock price to volatility, which may cause an
    investment in our stock to suffer a decline in
    value.
    
    variations in the amount and timing of sales of the SPECTRACEF
    products, ZYFLO CR, the ALLERX Dose Pack products, the HYOMAX
    line of products, our propoxyphene/acetaminophen products, and
    other products due to changes in product pricing, changes in the
    prevalence of disease conditions from quarter to quarter or
    other factors;
    the timing of operating expenses, including selling and
    marketing expenses and the costs of maintaining a direct sales
    force; 67




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
    the availability and timely delivery of a sufficient supply of
    the SPECTRACEF products, ZYFLO CR, the ALLERX Dose Pack
    products, the HYOMAX line of products, our
    propoxyphene/acetaminophen products, and other products;
    the amount of rebates, discounts and chargebacks to wholesalers,
    Medicaid, federal and state healthcare programs, and MCOs
    related to the SPECTRACEF products, ZYFLO CR, the ALLERX Dose
    Pack products, the HYOMAX line of products, our
    propoxyphene/acetaminophen products, and other products;
    the amount and timing of product returns for the SPECTRACEF
    products, ZYFLO CR, the ALLERX Dose Pack products, the HYOMAX
    line of products, our propoxyphene/acetaminophen products, and
    other products;
    achievement of, or the failure to achieve, milestones under our
    development agreement with MedImmune, our license agreement with
    Beckman Coulter and, to the extent applicable, other licensing
    and collaboration agreements;
    the results of ongoing and planned clinical trials of our
    product candidates;
    production problems occurring at our third-party manufacturers;
    the results of regulatory reviews relating to the development or
    approval of our product candidates; and
    general and industry-specific economic conditions that may
    affect our research and development expenditures.    If
    significant business or product announcements by us or our
    competitors cause fluctuations in our stock price, an investment
    in our stock may suffer a decline in value.
    
    our operating results, including the amount and timing of sales
    of our products, including the SPECTRACEF products, ZYFLO CR,
    the ALLERX Dose Pack products, the HYOMAX line of products, our
    propoxyphene/acetaminophen products, and other products;
    the availability and timely delivery of a sufficient supply of
    our products, including the SPECTRACEF products, ZYFLO CR, the
    ALLERX Dose Pack products, the HYOMAX line of products, our
    propoxyphene/acetaminophen products, and other products;
    Our licensing and collaboration agreements and the products or
    product candidates that are the subject of those agreements;
    the results of discovery, preclinical studies and clinical
    trials by us or our competitors;
    the acquisition of technologies, product candidates or products
    by us or our competitors;
    the development of new technologies, product candidates or
    products by us or our competitors;
    regulatory actions with respect to our product candidates or
    products or those of our competitors; and
    significant acquisitions, strategic partnerships, joint ventures
    or capital commitments by us or our competitors. 68




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Insiders
    have substantial control and could delay or prevent a change in
    corporate control, including a transaction in which our
    stockholders could sell or exchange their shares for a
    premium.
    
    delaying, deferring or preventing a change in control;
    impeding a merger, consolidation, takeover or other business
    combination; or
    discouraging a potential acquirer from making an acquisition
    proposal or otherwise attempting to obtain control.  Anti-takeover
    provisions in our charter documents and under Delaware law could
    prevent or frustrate attempts by our stockholders to change our
    management or board of directors and hinder efforts by a third
    party to acquire a controlling interest in our
    company.
      ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES    ITEM 3.
    LEGAL
    PROCEEDINGS  Adams
    Respiratory Therapeutics, Inc. (f/k/a Adams Laboratories,
    Inc.) v. Cornerstone BioPharma, Inc. and Carolina
    Pharmaceuticals, Inc.
 69




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Cornerstone BioPharma, Inc. and J-Med
    Pharmaceuticals, Inc. v. Vision Pharma, LLC and Nexgen
    Pharma, Inc. No. 5:07-CV-00389-F.
  J-Med
   70




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Cornerstone BioPharma, Inc. v. Vision Pharma,
    LLC
  ®
  Jeffrey Benison
    IRA v. Critical Therapeutics, Inc., Trevor Phillips,
    Richard W. Dugan, Christopher Mirabelli, and Jean George
   71




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##### Table of Contents



Breckenridge
    Pharmaceutical, Inc. v. Cornerstone BioPharma, Inc., J-Med
    Pharmaceuticals, Inc. and Allan M. Weinstein No. 8:08-CV-02999-DKC. ® ® and/or
  ITEM 4.  SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS      Number of SharesFor

Against

Abstain27,750,431

298,459

28,100     Number of SharesFor

Against

Abstain27,559,122

490,272

27,596     Number of SharesFor

Against

Abstain27,785,553

270,637

20,800    72




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EXECUTIVE
    OFFICERS OF THE REGISTRANT    Name

Age

PositionCraig A. Collard


43


President and Chief Executive OfficerChenyqua Baldwin


42


Vice President, Finance, Chief Accounting Officer, Controller,
    Assistant Treasurer and Assistant SecretaryBrian Dickson, M.D.


58


Chief Medical OfficerJoshua B. Franklin


39


Vice President, Sales and MarketingSteven M. Lutz


42


Executive Vice President, Manufacturing and TradeDavid Price


46


Executive Vice President, Finance, Chief Financial Officer,
    Treasurer and Assistant SecretaryScott B. Townsend, Esq.


42


General Counsel, Executive Vice President of Legal Affairs and
    Secretary   Craig A. Collard
  Chenyqua Baldwin
  Brian Dickson, M.D. Editor-in-Chief
 73




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Joshua B. Franklin
  Steven M. Lutz
  David Price
  Scott B. Townsend, Esq.
 74




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NON-EMPLOYEE
    DIRECTORS OF THE REGISTRANT    Name

Age

PositionChristopher Codeanne


41



DirectorMichael Enright


47



DirectorMichael Heffernan


44



DirectorAlastair McEwan


53



Director   Christopher Codeanne
  Michael Enright
  Michael Heffernan
  Alastair McEwan
 75




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PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES  Market
    Price of and Dividends on Cornerstone Therapeutics Inc.s
    Common Stock and Related Stockholder Matters
    Year Ended December 31, 2008

High


LowFirst Quarter (from January 1 to March 31)

$
14.50


$
6.70Second Quarter (from April 1 to June 30)

$
7.20


$
2.60Third Quarter (from July 1 to September 30)

$
4.20


$
1.20Fourth Quarter (from October 1 to December 31)

$
4.99


$
1.30   Year Ended December 31, 2007

High


LowFirst Quarter (from January 1 to March 31)

$
25.90


$
15.00Second Quarter (from April 1 to June 30)

$
32.30


$
16.00Third Quarter (from July 1 to September 30)

$
25.10


$
17.10Fourth Quarter (from October 1 to December 31)

$
25.20


$
12.70       Recent
    Sales of Unregistered Securities; Uses of Proceeds From
    Registered Securities
    Issuer
    Purchases of Equity Securities
    ISSUER
    PURCHASES OF EQUITY SECURITIES
  (c) Total Number of


(d) Maximum Number(a) Total





Shares Purchased as


of Shares that MayNumber of


(b) Average


Part of Publicly


Yet Be PurchasedShares


Price Paid


Announced Plans or


Under the Plans orPeriod

Purchased(1)


per Share


Programs


Programs10/1/2008 
    10/31/2008


2,265
(2)

$
3.90
(2)






11/1/2008 
    11/30/2008


220



3.60







12/1/2008 
    12/31/2008














Total


2,485


$
3.87







    (1)
    
    Relates to shares employees have elected to have withheld to
    cover their minimum tax withholding requirements related to the
    vesting of restricted stock during the fourth quarter of 2008.(2)
    
    As adjusted for the 10-to-1 reverse stock split effected on
    October 31, 2008.  ITEM
    6.  SELECTED FINANCIAL DATA   76




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##### Table of Contents



ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  You should read the following discussion and analysis of
    financial condition and results of operations together with our
    consolidated financial statements and the related notes included
    in this annual report on
    Form 10-K.
    In addition to historical information, the following discussion
    contains forward-looking statements that involve risks,
    uncertainties and assumptions. Our actual results could differ
    materially from those anticipated by the forward-looking
    statements due to important factors including, but not limited
    to, those set forth in the Risk Factors section of
    this annual report on
    Form 10-K.
  Overview
      Key
    Marketed Products
    SPECTRACEF.
 77




---



##### Table of Contents



ZYFLO CR and ZYFLO.
  ALLERX Dose Pack Products. 10-day 30-day
  
    ALLERX 10 Dose Pack and ALLERX 30 Dose Pack, both of which we
    began marketing in February 2008;
    ALLERX Dose Pack DF and ALLERX Dose Pack DF 30, which we began
    marketing in August 2006 and July 2007, respectively; and
    ALLERX Dose Pack PE and ALLERX Dose Pack PE 30, which we began
    marketing in September 2006 and October 2007, respectively.  ®
  Other
    Products
    HYOMAX.
  BALACET 325, APAP 325 and APAP 500.
 78




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##### Table of Contents



DECONSAL.
  Product
    Candidates
    
    SPECTRACEF Once Daily, a single tablet, once-daily dosage of
    SPECTRACEF, for which we commenced a clinical trial in the
    fourth quarter of 2008 and expect to commence additional
    clinical trials in late 2009, with an sNDA submission targeted
    for 2011; and
    SPECTRACEF Suspension, an oral, liquid suspension of SPECTRACEF,
    for which we expect to rely on previous clinical trials for use
    of this product candidate by children with pharyngitis or
    tonsillitis, conduct clinical trials in 2010 for the use of this
    product candidate by children with acute otitis media and submit
    an NDA in 2011 for use of this product candidate by children
    with acute otitis media, pharyngitis or tonsillitis.    History
    of Losses
   79




---



##### Table of Contents



Financial
    Operations Overview
  Net
    Revenues
      Cost
    of Product Sales
      Sales
    and Marketing Expenses
    Royalty
    Expenses
   80




---



##### Table of Contents



General
    and Administrative Expenses
    Research
    and Development Expenses
      Amortization
    of Product Rights
    Other
    Charges
    Critical
    Accounting Estimates
   81




---



##### Table of Contents




    the nature of the estimate or assumption is material due to the
    level of subjectivity and judgment necessary to account for
    highly uncertain matters or the susceptibility of such matters
    to change; and
    the impact of the estimates and assumptions on our financial
    condition or operating performance is material.  Form 10-K.
  Revenue
    Recognition
  Net
    Product Sales
  Product Sales. Revenue Recognition Revenue Recognition When Right of Return
    Exists
  Product Returns. 18-month
  Rebates.
  Price Adjustments and Chargebacks. and/or
  Special Promotional Programs.
 82




---



##### Table of Contents



No. 01-9, Accounting for Consideration Given by a Vendor to a
    Customer (Including a Reseller of the Vendors
    Products)
  Prompt Payment Discounts. and/or
    PriceAdjustments


PromptProduct





and


PaymentReturns


Rebates


Chargebacks


DiscountsBalance at December 31, 2006

$
5,781


$
140


$
687


$
43Current provision related to sales in current period


2,879



228



1,259



645Payments and credits


(3,747
)


(65
)


(1,118
)


(607
)Balance at December 31, 2007


4,913



303



828



81Current provision related to sales in current period


5,523



1,610



9,106



1,887Current provision related to sales made in prior periods


1,401







(185
)


Acquired in the merger


353



51



133



Payments and credits


(7,147
)


(1,080
)


(5,575
)


(1,666
)Balance at December 31, 2008

$
5,043


$
884


$
4,307


$
302        83




---



##### Table of Contents



Royalty
    Agreement Revenues
    Product
    Rights
    Inventory
  and/or first-in,
  Accrued
    Expenses
   84




---



##### Table of Contents



Stock-Based
    Compensation
  Share-Based Payment,
      No. 96-18, Accounting for Equity Instruments That Are Issued to Other
    Than Employees for Acquiring, or in Conjunction with Selling,
    Goods or Services
       85




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##### Table of Contents



Results
    of Operations
  Comparison
    of the Years Ended December 31, 2008 and 2007
  Net
    Revenues
    Year Ended December 31,Change


Change2008


2007


($)


(%)(In thousands, except percentages)Net Product SalesALLERX 10 Dose Pack/ALLERX 30 Dose Pack

$
12,335


$
11,103


$
1,232



11
%ALLERX Dose Pack DF/ALLERX Dose Pack DF 30


6,244



967



5,277



546
%ALLERX Dose Pack PE/ALLERX Dose Pack PE 30


7,816



1,439



6,377



443
%SPECTRACEF


6,981



6,886



95



1
%BALACET 325


4,388



4,403



(15
)


HYOMAX


22,962







22,962



N/ADECONSAL CT and DECONSAL DM


(59
)


99



(158
)


(160
%)ZYFLO CR and ZYFLO(1)


888







888



N/AOther currently marketed products


1,911



671



1,240



185
%Discontinued products


(261
)


679



(940
)


(138
%)Total Net Product Sales


63,205



26,247



36,958



141
%Royalty Agreement Revenues


1,662



1,824



(162
)


(9
%)Net Revenues

$
64,867


$
28,071


$
36,796



131
%     (1)
    
    Does not include the historical sales of ZYFLO CR and ZYFLO made
    by Critical Therapeutics prior to the completion of the merger
    on October 31, 2008.  Net Product Sales.
  
    $23.0 million in net product sales of the HYOMAX line of
    products, the first of which was launched in May 2008;
    a $12.9 million increase in net product sales of the ALLERX
    Dose Pack family of products, primarily due to increased sales
    volume, price increases on all ALLERX Dose Pack products and
    packaging issues in 2007 that delayed product shipments until
    2008; and
    $888,000 in net product sales of ZYFLO CR and ZYFLO during the
    last two months of 2008.  Royalty Agreement Revenues.
  Costs and
    Expenses
  Cost of Product Sales.
 86




---



##### Table of Contents



Sales and Marketing Expenses.
  
    a $1.7 million increase in labor, benefits, related
    employee expenses and travel-related expenses, primarily due to
    the reorganization of our commission-based sales force in May
    2008, whereby we consolidated all of our sales functions under
    one national sales director, reduced the size of our sales team
    from 93 sales professionals to 59 sales professionals and began
    compensating all of our sales professionals with salaries,
    bonuses and related benefits. Although this reorganization
    resulted in a reduction in the total number of employees on our
    sales force, our labor, benefits, other employee expenses and
    travel-related expenses increased due to the more generous pay,
    benefits and travel-reimbursement packages given to the former
    commission-based sales professionals who were retained following
    the reorganization;
    a $1.7 million increase in co-promotion expenses that was
    primarily due to renegotiated contract terms with our
    co-promotion partners; and
    a $1.4 million increase in advertising and promotion
    expenses, primarily due to product launches and increased
    promotional efforts.    Royalty Expenses.
  General and Administrative Expenses.
  
    $2.7 million increase in labor, benefits, related employee
    expenses and travel-related expenses due to our growth during
    2008;
    $1.4 million in merger-related legal and accounting
    expenses that were not capitalized as direct costs of the merger;
    $648,000 increase in FDA regulatory related fees;
    $266,000 increase in product liability and other insurance
    related costs;
    $170,000 increase in facility lease related costs; and
    $160,000 increase in corporate advertising and promotional costs.  Research and Development Expenses.
 87




---



##### Table of Contents



Year EndedDecember 31,2008


2007(In thousands)Product candidate:SPECTRACEF 400 mg

$
93


$
383SPECTRACEF Once Daily


521



SPECTRACEF  Qualification of Backup Manufacturer






90SPECTRACEF Suspension


257



ALLERX


272



402Anticholinergic and Antihistamine Product Candidate (CRTX 058)


13



Antitussive and Antihistamine Combination Product Candidates
    (CRTX 067 and CRTX 069)


661



Alpha-7 Product Candidate (CRTX 803)


1,909



ZYFLO CR


66



Generic Product Development


44



73Consulting


2



Total

$
3,838


$
948               Amortization of Product Rights.
  Other Charges.
  Other
    Expenses
  Interest Expense, Net.
 88




---



##### Table of Contents



Loss on Marketable Security.
  Provision
    for Income Taxes
    Liquidity
    and Capital Resources
  Sources
    of Liquidity
    Cash
    Flows
    Year Ended December 31,2008


2007Cash provided by (used in):Operating activities

$
12,629


$
1,563Investing activities


(346
)


(718
)Financing activities


(3,238
)


(720
)Net increase in cash and cash equivalents

$
9,045


$
125   Net Cash
    Provided By Operating Activities
     89




---



##### Table of Contents



Net Cash
    Used in Investing Activities
        Net Cash
    Used in Financing Activities
        Funding
    Requirements
   90




---



##### Table of Contents




    the level of product sales of our currently marketed products
    and any additional products that we may market in the future;
    the scope, progress, results and costs of development activities
    for our current product candidates;
    the costs, timing and outcome of regulatory review of our
    product candidates;
    the number of, and development requirements for, additional
    product candidates that we pursue;
    the costs of commercialization activities, including product
    marketing, sales and distribution;
    the costs and timing of establishing manufacturing and supply
    arrangements for clinical and commercial supplies of our product
    candidates and products;
    the extent to which we acquire or invest in products, businesses
    and technologies;
    the extent to which we choose to establish collaboration,
    co-promotion, distribution or other similar arrangements for our
    marketed products and product candidates; and
    the costs of preparing, filing and prosecuting patent
    applications and maintaining, enforcing and defending claims
    related to intellectual property owned by or licensed to us.      Paragon
    Line of Credit
   91




---



##### Table of Contents



Off-Balance
    Sheet Arrangements
    Effects
    of Inflation
    Recent
    Accounting Pronouncements
  Form 10-K
  ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK   92




---



##### Table of Contents



ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
  PageReport of Independent Registered Public
    Accounting Firm


94Consolidated Balance Sheets as of
    December 31, 2008 and December 31, 2007


95Consolidated Statements of Income for the Years
    ended December 31, 2008 and December 31, 2007


96Consolidated Statements of Stockholders
    Equity (Deficit) and Comprehensive Income for the Years ended
    December 31, 2008 and December 31, 2007


97Consolidated Statements of Cash Flows for the
    Years ended December 31, 2008 and December 31, 2007


98Notes to Consolidated Financial Statements


99  93




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                94




---



##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  CONSOLIDATED
    BALANCE SHEETS
 (In
    thousands, except share and per share data)
  December 31,2008


2007AssetsCurrent assets:Cash and cash equivalents

$
9,286


$
241Marketable securities


300



8Accounts receivable, net


13,660



6,529Amounts due from related parties






648Inventories, net


11,222



2,998Prepaid expenses


1,081



278Deferred income tax asset


2,428



Total current assets


37,977



10,702Property and equipment, net


895



209Product rights, net


17,702



4,936Goodwill


13,231



Amounts due from related parties


38



29Deposits


46



33Total assets

$
69,889


$
15,909Liabilities and Stockholders Equity (Deficit)Current liabilities:Accounts payable

$
10,288


$
2,214Accrued expenses


19,052



11,092Current portion of license agreement liability


2,543



647Line of credit






1,750Income taxes payable


2,937



130Total current liabilities


34,820



15,833Long-term liabilities:License agreement liability, less current portion


2,313



2,959Note payable, related party






9,412Deferred income tax liability


3,330



Total long-term liabilities


5,643



12,371Total liabilities


40,463



28,204Commitments and contingencies, Note 16Stockholders equity (deficit)Preferred stock  $0.001 par value, 5,000,000 shares
    authorized; no shares issued and outstanding






Common stock  $0.001 par value,
    90,000,000 shares authorized; 12,023,747 and
    5,934,496 shares issued and outstanding as of
    December 31, 2008 and December 31, 2007, respectively


12



6Additional paid-in capital


33,519



797Accumulated deficit


(4,105
)


(13,098
)Total stockholders equity (deficit)


29,426



(12,295
)Total liabilities and stockholders equity (deficit)

$
69,889


$
15,909    95




---



##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  CONSOLIDATED
    STATEMENTS OF INCOME
 (In
    thousands, except share and per share data)
  Year Ended December 31,2008


2007Net revenues

$
64,867


$
28,071Costs and expenses:Cost of product sales (exclusive of amortization of product
    rights)


5,951



3,300Sales and marketing


16,993



10,391Royalties


16,193



3,409General and administrative


9,757



4,177Research and development


3,838



948Amortization of product rights


1,334



3,160Other charges


173



245Total costs and expenses


54,239



25,630Income from operations


10,628



2,441Other expenses:Interest expense, net


(1,211
)


(1,410
)Loss on marketable security


(8
)


(323
)Other expenses


(2
)


(8
)Total other expenses


(1,221
)


(1,741
)Income before income taxes


9,407



700Provision for income taxes


(414
)


(130
)Net income

$
8,993


$
570Net income per share, basic

$
1.29


$
.10Net income per share, diluted

$
1.14


$
.08Weighted-average common shares, basic


6,951,896



5,934,496Weighted-average common shares, diluted


7,861,119



6,751,127    96




---



##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.CONSOLIDATED STATEMENTS OF
    STOCKHOLDERS EQUITY (DEFICIT) AND COMPREHENSIVE INCOME
    (In thousands, except share data)
  AccumulatedAdditional


Other





Total


TotalCommon Stock


Paid-in


Comprehensive


Accumulated


Stockholders


ComprehensiveShares


Amount


Capital


Income (Loss)


Deficit


Equity (Deficit)


IncomeBalance as of December 31, 2006


5,934,496



6



(4
)


(178
)


(13,668
)


(13,844
)Stock-based compensation










801











801Unrealized loss on investment














(145
)






(145
)

$
(145
)Reclassification adjustment for losses on investments included
    in net income (net of tax)














323







323



323Net income


















570



570



570Total comprehensive income

























$
748Balance as of December 31, 2007


5,934,496



6



797







(13,098
)


(12,295
)Issuance of shares in connection with the Merger (net of
    issuance costs of $504)


4,325,498



4



22,971











22,975Exercise of common stock warrants


316,101







52











52Stock-based compensation










749











749Conversion of related party note payable to common stock


1,443,913



1



8,951











8,952Issuance of common stock to employees under stock incentive plan


3,959



















Restricted stock buyback


(220
)


















Net income


















8,993



8,993



8,993Total comprehensive income

























$
8,993Balance as of December 31, 2008


12,023,747


$
12


$
33,519


$



$
(4,105
)

$
29,426    97




---



##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
 (In
    thousands)
  Year Ended December 31,2008


2007Cash flows from operating activitiesNet income


8,993



570Adjustments to reconcile net income to net cash provided by
    operating activities:Amortization and depreciation


1,425



3,231Change in allowance for prompt payment discounts


221



38Change in allowance for inventory obsolescence


476



101Stock-based compensation


749



801Loss on marketable security


8



323Write-off of acquired in-process research and development


1,900



Impairment of property and equipment


56



Benefit for deferred income taxes


(3,310
)


Changes in operating assets and liabilities:Accounts receivable


(5,050
)


(4,287
)Amounts due from related parties






117Inventories


(2,400
)


(1,252
)Prepaid expenses


(602
)


(12
)Accounts payable


2,573



783Accrued expenses


4,505



1,020Income taxes payable


3,085



130Net cash provided by operating activities


12,629



1,563Cash flows from investing activitiesAdvances to related parties


(19
)


(876
)Proceeds from collection of advances to related parties


657



262Purchase of property and equipment


(638
)


(64
)Purchase of product rights


(2,450
)


(75
)Collection of deposits


223



50Payment of deposits


(237
)


(15
)Cash acquired in connection with the Merger, net of costs paid


2,118



Net cash used in investing activities


(346
)


(718
)Cash flows from financing activitiesPrincipal payments on license agreement liability

$
(576
)

$
(720
)Proceeds from line of credit


7,250



9,000Principal payments on line of credit


(9,000
)


(9,000
)Principal payments on related party note payable


(460
)


Exercise of common stock warrants


52



Payment of stock issuance costs in connection with the Merger


(504
)


Net cash used in financing activities


(3,238
)


(720
)Net increase in cash and cash equivalents


9,045



125Cash and cash equivalents as of beginning of year


241



116Cash and cash equivalents as of end of year

$
9,286


$
241Supplemental disclosure of cash flow informationCash paid during the year for interest

$
2,734


$
433Cash paid during the year for income taxes

$
644


$
Supplemental schedule of non-cash investing and financing
    activitiesProduct rights acquired through issuance of a license agreement

$



$
2,565Related party note payable converted to common stock in
    connection with the Merger

$
8,952


$
Common stock issued in connection with the Merger

$
23,479


$
    98




---



##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  NOTE 1:
    ORGANIZATION
    AND BASIS OF PRESENTATION  Nature of
    Operations
    Principles
    of Consolidation
      Merger
       99




---



##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  NOTE 2:
    SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES  Use of
    Estimates
    Segment
    and Geographic Information
  Disclosures about Segments of an Enterprise and Related
    Information
    Concentrations
    of Credit Risk and Limited Suppliers
     100




---



##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended December 31,2008


2007Gross


GrossProduct


ProductSales


SalesCardinal Health


40
%


43
%McKesson Drug


31
%


34
%Amerisouce-Bergen Drug Corp


15
%


14
%Total


86
%


91
%   December 31,2008


2007Accounts


AccountsReceivable


ReceivableCardinal Health


35
%


McKesson Drug


32
%


75
%Amerisouce-Bergen Drug Corp


16
%


17
%Total


83
%


92
%   Cash and
    Cash Equivalents
      Marketable
    Securities
  Accounting for
    Certain Investments in Debt and Equity Securities
   101




---



##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Accounts
    Receivable
  and/or
      2008


2007Trade accounts receivable

$
13,289


$
3,585Royalties receivable


427



998Other receivables


246



2,027Total accounts receivable


13,962



6,610Less allowance for prompt payment discounts


(302
)


(81
)Accounts receivable, net

$
13,660


$
6,529   Inventories
  first-in, and/or
   102




---



##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2008


2007Raw materials

$
6,393


$
1,564Work in process


1,832



287Finished goods:Pharmaceutical products  trade


3,182



625Pharmaceutical products  samples


492



723Total


11,899



3,199Inventory allowances


(677
)


(201
)Inventories, net

$
11,222


$
2,998   Property
    and Equipment
      Useful Life (Years)

2008


2007Computers and software

3-5

$
365


$
244Machinery and equipment

3-7


113



6Furniture and fixtures

5-7


523



114Leasehold improvements

Lesser of lease term or 7


82



15Total




1,083



379Less accumulated depreciation




(188
)


(170
)Property and equipment, net



$
895


$
209       Intangible
    Assets
   103




---



##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Impairment
    of Long-Lived Assets
  Accounting for the Impairment or Disposal of Long-Lived
    Assets
  Goodwill and Other Intangible
    Assets
  Revenue
    Recognition
    Year Ended December 312008


2007Gross product sales

$
82,547


$
31,258Sales allowances


(19,342
)


(5,011
)Net product sales


63,205



26,247Royalty agreement revenues


1,662



1,824Net revenues

$
64,867


$
28,071   Net
    Product Sales
  Product Sales. Revenue Recognition Revenue Recognition When Right of
    Return Exists
 104




---



##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Product Returns. 18-month
  Rebates.
  Price Adjustments and Chargebacks. and/or
  Special Promotional Programs. (EITF) No. 01-9, Accounting for Consideration Given by a Vendor to a Customer
    (Including a Reseller of the Vendors Products) ®
  Prompt Payment Discounts.
  Royalty
    Agreement Revenues
   105




---



##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Advertising
    Shipping
    and Handling Costs
    Stock-Based
    Compensation
  Share-Based Payment
  No. 96-18, Accounting for Equity Instruments That Are Issued to Other
    Than Employees for Acquiring, or in Conjunction with Selling,
    Goods or Services
  Other
    Charges
    Income
    Taxes
    Fair
    Value of Financial Instruments
    The
    Fair Value Option for Financial Assets and Financial
    Liabilities, Including an amendment of FASB Statement
    No. 115
 106




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##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fair
    Value Measurements 157-2, Effective Date of FASB Statement No. 157 FAS 157-2),
  Reclassifications
    New
    Accounting Pronouncements
  142-3, Determination of the Useful Life of Intangible Assets FAS 142-3). FAS 142-3 FAS 142-3 FSP FAS 142-3 FAS 142-3
  No. 07-1, Accounting for Collaborative Arrangements (EITF 07-1). EITF 07-1 EITF 07-1 EITF 07-1
 107




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##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Business Combinations Business Combinations
  Noncontrolling Interests in Consolidated Financial
    Statements  an amendment of ARB No. 51
  NOTE 3:
    MERGER        Fair value of Critical Therapeutics shares outstanding

$
23,479Acquiring company transaction costs incurred


1,753Purchase price

$
25,232    108




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##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Cash and cash equivalents

$
3,871Accounts receivable


2,302Inventory


6,300Prepaid expenses and other current assets


701Fixed assets


315Other assets


40Intangible assets:Product rights


11,500Acquired in-process research and development


1,900Goodwill


13,231Assumed liabilities


(14,928
)Total

$
25,232     Raw materials

$
5,314Work in process


393Finished goods


593Total

$
6,300       ZYFLO
    CR®

    product rights

$
11,500Alpha-7 program


1,900Total

$
13,400        109




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##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Pro Forma
    Results of Operations (Unaudited)
    Year Ended December 31,2008


2007(Unaudited)Net revenues

$
78,972


$
40,940Net loss

$
(17,073
)

$
(38,383
)Basic and diluted net loss per common share

$
(2.46
)

$
(6.47
)   NOTE 4:
    GOODWILL
    AND INTANGIBLE ASSETS  Goodwill
    Intangible
    Assets
    2008


2007Product rights


26,730



12,630Less accumulated amortization


(9,028
)


(7,694
)Product rights net

$
17,702


$
4,936    110




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##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2009

$
2,0422010


2,0422011


2,0312012


2,0252013


2,025Thereafter


4,437$
14,602   NOTE 5:
    LINE OF
    CREDIT      NOTE 6:
    RELATED
    PARTY NOTE PAYABLE     111




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##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Early Extinguishment of Debt
  NOTE 7:
    STOCKHOLDERS
    EQUITY (DEFICIT)  Authorized
    Capital
    Warrants
    to Purchase Common Stock
       112




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##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      NOTE 8:
    STOCK-BASED
    COMPENSATION  Overview
    of Stock-Based Compensation Plans
  2000
    Equity Plan and 2003 Stock Incentive Plan Assumed from Critical
    Therapeutics in the Merger
    2004
    Stock Incentive Plan Assumed from Critical Therapeutics in the
    Merger
       113




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##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  2005
    Stock Option Plan and 2005 Stock Incentive Plan
          Stock
    Option Activity
    Weighted AverageNumber of Shares


Exercise PriceOutstanding at January 1, 2007


682,876


$
0.46Granted


1,135,064


$
1.81Forfeited


(7,352
)

$
0.63Outstanding at January 1, 2008


1,810,588


$
12.80Granted


432,004


$
3.72Assumed in Merger


245,813


$
40.39Forfeited


(39,008
)

$
1.93Expired


(11,825
)

$
41.29Outstanding at December 31, 2008


2,437,572


$
5.45Vested or expected to vest at December 31, 2008


2,400,901


$
5.50Exercisable December 31, 2008


1,071,371


$
9.32Exercisable December 31, 2007


406,501


$
0.46  114




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##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Number








Intrinsic Valueof Stock





Fair Value of


of StockGrant

Options


Exercise


Common Stock at


OptionsDate

Granted


Price


Grant Date


at Grant Date3/16/2007


1,065,414


$
1.76


$
1.76


$
5/24/2007


15,829



1.76



1.76



9/14/2007


29,996



2.02



2.02



12/5/2007


23,804



2.02



2.02



10/31/2008


351,275



3.90



3.90



1,486,318










$
         OutstandingWeighted-





ExercisableAverage


Weighted-





Weighted-Contractual Life


Average





AverageNumber of Options


Outstanding


Exercise


Options


ExerciseExercise Price

Outstanding


(In Years)


Price


Exercisable


Price$0.42


633,271



7.06


$
0.42



522,076


$
0.42$1.05


39,283



6.50


$
1.05



36,308


$
1.05$1.76


1,077,451



8.21


$
1.76



269,463


$
1.76$2.02-$2.93


99,996



9.73


$
2.75



7,321


$
2.33$3.90


351,292



9.83


$
3.90



7,827


$
3.90$7.40-$16.50


27,674



2.02


$
10.56



26,750


$
10.53$16.51-$28.50


81,225



1.41


$
20.37



76,629


$
20.34$28.51-$55.20


42,300



2.04


$
43.38



41,198


$
43.49$55.21-$74.70


75,780



1.12


$
65.07



74,515


$
64.98$74.71-$85.80


9,300



3.74


$
78.39



9,284


$
78.392,437,572



7.54


$
5.45



1,071,371


$
9.32    115




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##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Restricted
    Stock Issuances
        Weighted-AverageNumber of


Grant DateShares


Fair ValueUnvested  January 1, 2008


51,039


$
0.00Granted


473,855



3.96Assumed in the Merger (unvested)


5,460



17.20Vested


(54,999
)


1.32Unvested  December 31, 2008


475,355


$
4.01       Stock-Based
    Compensation Expense
   116




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##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended December 31,2008


2007Estimated dividend yield


0.00%



0.00%Expected stock price volatility


75.00%



68.00%Risk-free interest rate


1.43% - 3.05%



3.52% - 4.79%Expected life of option (in years)


6



6.04Weighted-average fair value per share


$2.50



$1.15         Share-Based Payment
      NOTE 9:
    NET
    INCOME PER SHARE  Earnings per Share
 117




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##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Year EndedDecember 31,2008


2007Numerator:Net income

$
8,993


$
570Denominator:Weighted-average common shares, basic


6,951,896



5,934,496Dilutive effect of stock options, warrants and restricted stock


909,223



816,631Weighted-average common shares, diluted


7,861,119



6,751,127     NOTE 10:
    LEASES  Lease
    Obligations
        OperatingYear Ending

Leases2009

$
6982010


4022011


3762012


3712013


383Thereafter


976Total minimum lease payments

$
3,206  118




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##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  NOTE 11:
    ACCRUED
    EXPENSES    2008


2007Accrued product returns

$
5,043


$
4,913Accrued rebates


884



303Accrued price adjustments and chargebacks


4,307



828Accrued compensation and benefits


2,507



1,596Accrued royalties


6,259



1,940Accrued interest, affiliate






1,490Accrued expenses, other


52



22Total accrued expenses

$
19,052


$
11,092   NOTE 12:
    EMPLOYEE
    BENEFIT PLANS        NOTE 13:
    INCOME
    TAXES    Accounting for Uncertainty in Income Taxes  an
    interpretation of FASB Statement No. 109
 119




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##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
            Year Ended, December 312008


2007Current:Federal

$
3,161


$
62State


563



68Total


3,724



130Deferred:Federal


(2,930
)


State


(380
)


Total


(3,310
)


Total tax provision

$
414


$
130     2008


2007Current:Deferred tax assets:Accounts receivable, net

$
116


$
31Inventories, net


400



177Accrued expenses


2,542



2,881Valuation allowance






(3,089
)Total current deferred tax assets


3,058



Deferred tax liabilities:Acquired intellectual property


(630
)


Net current deferred tax assets

$
2,428


$
  120




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##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  2008


2007Noncurrent:Deferred tax assets:Tax loss carryforwards

$
61,888


$
656Deferred compensation


293



203Product license rights, net


315



244Organizational costs, net






2Tax credits


1,900



62Valuation allowance


(63,788
)


(1,143
)Total noncurrent deferred tax assets


608



24Deferred tax liabilities:Acquired intellectual property


(3,783
)


Property and equipment, net


(155
)


(24
)Total noncurrent deferred tax liabilities


(3,938
)


(24
)Net deferred tax liability  noncurrent


(3,330
)


Total net deferred tax liability

$
(902
)

$
     2008


2007United States federal tax at statutory rate

$
3,198


$
238State taxes (net of federal benefit)


412



30Nondeductible expenses


403



237Acquired in-process research and development


729



Other


(96
)


(32
)Decrease in valuation allowance


(4,232
)


(343
)Provision for income taxes

$
414


$
130   Accounting for Income Taxes
   121




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##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          2008


2007Current:Deferred tax assets (liabilities):Accrued expenses

$
201


$
Acquired intellectual property


(630
)


Net current deferred tax liabilities


(429
)


Noncurrent:Deferred tax assets (liabilities):Tax loss carryforwards

$
62,165


$
Tax credits


1,900



Acquired intellectual property


(3,783
)


Valuation allowance


(64,065
)


Net noncurrent deferred tax liabilities


(3,783
)


Total net deferred tax liability


(4,212
)


    122




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##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  NOTE 14:
    RELATED
    PARTY TRANSACTIONS  Stockholders
      Other
    Related Parties
  ® ®
       123




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##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  NOTE 15:
    LICENSE
    AGREEMENT LIABILITY  Abbott
  60-days
  Jagotec
    Meiji
   124




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##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    and/or
      2008


2007License agreement liability to Abbott; imputed interest at 5%
    per annum; principal and interest payable in May 2009

$
1,471


$
License agreement liability to Jagotec; imputed interest at 5%
    per annum; principal and interest payable in May 2009


368



License agreement liability to Meiji; imputed interest at 12%
    per annum; principal and interest payable for the remaining
    three and four years, respectively


3,017



3,606Less current portion


(2,543
)


(647
)Long-term

$
2,313


$
2,959     2009

$
2,5432010


9722011


1,341Total

$
4,856   NOTE 16:
    COMMITMENTS
    AND CONTINGENCIES  Royalties
     125




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##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Supply
    Agreements
  Concentrations
   126




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##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Vintage
    Meiji
    Shasun
  18-months
  Jagotec
  12-month 24-months 36-months
  Patheon
   127




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##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  12-months 18-months
  12-months 18-months
  Sovereign
  ®
  DEY
    Co-Promotion and Marketing Services Agreements
      Other
    Co-promotion Agreements
     128




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##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Settlements
  Adams
    Respiratory Therapeutics, Inc.
  18-month 18-month 18-month
   129




---



##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Others
    Legal
    Proceedings
      Jeffrey Benison IRA v. Critical Therapeutics, Inc.,
    Trevor Phillips, Richard W. Dugan, Christopher Mirabelli, and
    Jean George
 130




---



##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Product
    Agreements
     131




---



##### Table of Contents



CORNERSTONE
    THERAPEUTICS INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Severance
   132




---



##### Table of Contents



ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A.
    CONTROLS
    AND PROCEDURES    ITEM 9A(T).
    CONTROLS
    AND PROCEDURES  Conclusion
    Regarding the Effectiveness of Disclosure Controls and
    Procedures
  Rules 13a-15(e) 15d-15(e)
  Managements
    Report on Internal Control Over Financial Reporting
    Rules 13a-15(f) 15d-15(f)
 133




---



##### Table of Contents



Form 10-K
  Internal Control  Integrated
    Framework Form 10-K
    Form 10-K Form 10-K
  Changes
    in Internal Control Over Financial Reporting
       134




---



##### Table of Contents



Rules 13a-15(f) 15d-15(f)
  ITEM 9B.
    OTHER
    INFORMATION   135




---



##### Table of Contents



PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE  Directors
    and Executive Officers
  Form 10-K.
  Compliance
    With Section 16(a) of the Exchange Act
    Code of
    Ethics
    Director
    Nominees
    Audit
    Committee
    Audit
    Committee Financial Expert
  Regulation S-K
  ITEM 11.
    EXECUTIVE
    COMPENSATION   136




---



##### Table of Contents



ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS    ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE    ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES   PART IV  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES  Financial Statements.
  Form 10-K.
  Financial Statement Schedules.
    Exhibits.
  Form 10-K
   137




---



##### Table of Contents



SIGNATURES      By:
    /s/  CRAIG
    A. COLLARD            Signature

Title

Date/s/  CRAIG
    A. COLLARDCraig
    A. Collard

President, Chief Executive Officer and Director (Principal
    Executive Officer)

March 26, 2009/s/  DAVID
    PRICEDavid
    Price

Executive Vice President,
    Finance, and 
    Chief Financial Officer
    (Principal Financial Officer)

March 26, 2009/s/  CHENYQUA
    BALDWINChenyqua
    Baldwin

Vice President, Finance,
    Chief Accounting Officer and Controller
    (Principal Accounting Officer)

March 26, 2009/s/  CHRISTOPHER
    CODEANNEChristopher
    Codeanne

Director

March 26, 2009/s/  MICHAEL
    ENRIGHTMichael
    Enright

Director

March 26, 2009/s/  MICHAEL
    HEFFERNANMichael
    Heffernan

Director

March 26, 2009/s/  ALASTAIR
    MCEWANAlastair
    McEwan

Director

March 26, 2009  138




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##### Table of Contents



Exhibit Index  Exhibit No.

Description2
.1

Agreement and Plan of Merger, dated as of May 1, 2008, by
    and among the Registrant, Neptune Acquisition Corp. and
    Cornerstone BioPharma Holdings, Inc. (incorporated by reference
    to Exhibit 2.1 to the Registrants Current Report on
    Form 8-K
    dated May 1, 2008 (SEC File
    No. 000-50767)).2
.2

Amendment No. 1, dated as of August 7, 2008, to
    Agreement and Plan of Merger, dated as of May 1, 2008,
    among the Registrant, Neptune Acquisition Corp. and Cornerstone
    BioPharma Holdings, Inc. (incorporated by reference to
    Exhibit 2.2 to the Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 2008 (SEC File
    No. 000-50767)).2
.3

Form of Merger Partner Stockholder Agreement among the
    Registrant, Cornerstone BioPharma Holdings, Inc. and certain
    stockholders of Cornerstone BioPharma Holdings, Inc.
    (incorporated by reference to Exhibit 2.2 to the
    Registrants Registration Statement on
    Form S-4/A
    dated September 29, 2008 (SEC File
    No. 333-152442)).2
.4

Merger Partner Noteholder Agreement, dated as of May 1,
    2008, among the Registrant, Cornerstone BioPharma Holdings,
    Inc., Cornerstone BioPharma, Inc. and Carolina Pharmaceuticals
    Ltd. (incorporated by reference to Exhibit 2.4 to the
    Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 2008 (SEC File
    No. 000-50767)).2
.5

Amendment No. 1, dated as of August 7, 2008, to Merger
    Partner Noteholder Agreement, dated as of May 1, 2008,
    among the Registrant, Cornerstone BioPharma Holdings, Inc.,
    Cornerstone BioPharma, Inc. and Carolina Pharmaceuticals Ltd.
    (incorporated by reference to Exhibit 2.5 to the
    Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 2008 (SEC File
    No. 000-50767)).2
.6

Form of Public Company Stockholder Agreement among Cornerstone
    BioPharma Holdings, Inc., the Registrant and certain
    stockholders of the Registrant (incorporated by reference to
    Exhibit 2.5 to the Registrants Registration Statement
    on
    Form S-4/A
    dated September 29, 2008 (SEC File
    No. 333-152442)).3
.1

Amended and Restated Certificate of Incorporation of the
    Registrant (incorporated by reference to Exhibit 3.1 to the
    Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 2004 (SEC File
    No. 000-50767)).3
.2

Amendment to the Registrants Certificate of Incorporation,
    effecting a 10-to-1 reverse stock split of the Registrants
    common stock (incorporated by reference to Exhibit 3.1 to
    the Registrants Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).3
.3

Amendment to the Registrants Certificate of Incorporation,
    changing the name of the corporation from Critical Therapeutics,
    Inc. to Cornerstone Therapeutics Inc. (incorporated by reference
    to Exhibit 3.2 to the Registrants Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).3
.4

Third Amended and Restated Bylaws of the Registrant dated
    October 4, 2007 (incorporated by reference to
    Exhibit 3.1 to the Registrants Current Report on
    Form 8-K
    dated October 4, 2007 (SEC File
    No. 000-50767)).4
.1

Form of the Registrants Stock Certificate (incorporated by
    reference to Exhibit 4.1 to the Registrants Current
    Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.1+

Co-Promotion and Marketing Services Agreement between the
    Registrant and Dey, L.P. dated March 13, 2007 (incorporated
    by reference to Exhibit 10.2 to the Registrants
    Quarterly Report on
    Form 10-Q
    for the quarter ended March 31, 2007 (SEC File
    No. 000-50767)).10
.2+

Amendment No. 1, dated June 25, 2007, to Co-Promotion
    and Marketing Services Agreement between the Registrant and Dey,
    L.P. dated March 13, 2007 (incorporated by reference to
    Exhibit 10.5 to the Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 2007 (SEC File
    No. 000-50767)).10
.3+

Copromotion Agreement between Atley Pharmaceuticals, Inc. and
    Cornerstone BioPharma, Inc. dated April 2, 2007
    (incorporated by reference to Exhibit 10.3 to the
    Registrants Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).




---



##### Table of Contents



Exhibit No.

Description10
.4+

First Amendment, dated July 1, 2008, to Copromotion
    Agreement between Atley Pharmaceuticals, Inc. and Cornerstone
    BioPharma, Inc. dated April 2, 2007 (incorporated by
    reference to Exhibit 10.4 to the Registrants Current
    Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.5+

License and Supply Agreement between Meiji Seika Kaisha, Ltd.
    and Cornerstone BioPharma, Inc. dated October 12, 2006
    (incorporated by reference to Exhibit 10.6 to the
    Registrants Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.6

Amendment No. 1, dated July 27, 2007, to License and
    Supply Agreement between Meiji Seika Kaisha, Ltd. and
    Cornerstone BioPharma, Inc. dated October 12, 2006
    (incorporated by reference to Exhibit 10.7 to the
    Registrants Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.7+

Letter Agreement between Meiji Seika Kaisha, Ltd. and
    Cornerstone BioPharma, Inc. dated July 27, 2007
    (incorporated by reference to Exhibit 10.8 to the
    Registrants Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.8+

Formulation Agreement between Meiji Seika Kaisha, Ltd. and
    Cornerstone BioPharma, Inc. dated January 11, 2008
    (incorporated by reference to Exhibit 10.9 to the
    Registrants Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.9+

Addendum, dated August 14, 2008, to License and Supply
    Agreement between Meiji Seika Kaisha, Ltd. and Cornerstone
    BioPharma, Inc. dated October 12, 2006 (incorporated by
    reference to Exhibit 10.10 to the Registrants Current
    Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.10+

Joint Development Agreement between Meiji Seika Kaisha, Ltd. and
    Cornerstone BioPharma, Inc. dated February 11, 2008
    (incorporated by reference to Exhibit 10.11 to the
    Registrants Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.11+

Agreement for Manufacturing and Supply of Zileuton between
    Rhodia Pharma Solutions Ltd. and the Registrant dated
    February 8, 2005 (incorporated by reference to
    Exhibit 10.41 to the Registrants Annual Report on
    Form 10-K
    for the year ended December 31, 2004 (SEC File
    No. 000-50767)).10
.12+

Amendment No. 1, dated May 9, 2007, to Agreement for
    Manufacturing and Supply of Zileuton, between Shasun Pharma
    Solutions Limited and the Registrant dated February 8, 2005
    (incorporated by reference to Exhibit 10.4 to the
    Registrants Quarterly Report on
    Form 10-Q
    for the period ended March 31, 2007 (SEC File
    No. 000-50767)).10
.13+

Manufacturing and Supply Agreement by and among the Registrant,
    Jagotec AG and SkyePharma PLC dated August 20, 2007
    (incorporated by reference to Exhibit 10.1 to the
    Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended September 30, 2007 (SEC File
    No. 000-50767)).10
.14+

Manufacturing Services Agreement between Patheon Pharmaceuticals
    Inc. and the Registrant dated May 9, 2007 (incorporated by
    reference to Exhibit 10.5 to the Registrants
    Quarterly Report on
    Form 10-Q
    for the period ended March 31, 2007 (SEC File
    No. 000-50767)).10
.15+

First Amendment, dated November 5, 2007, to Manufacturing
    Services Agreement between Patheon Pharmaceuticals Inc. and the
    Registrant dated May 9, 2007 (incorporated by reference to
    Exhibit 10.2 to the Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended September 30, 2007 (SEC File
    No. 000-50767)).10
.16+

Agreement between Patheon, Inc. (formerly known as MOVA
    Pharmaceutical Corporation) and Cornerstone BioPharma, Inc.
    dated August 8, 2007 (incorporated by reference to
    Exhibit 10.1 to the Registrants Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.17+

Change of Scope Agreement between Patheon, Inc. (formerly known
    as MOVA Pharmaceutical Corporation) and Cornerstone BioPharma,
    Inc. dated November 20, 2007 (incorporated by reference to
    Exhibit 10.2 to the Registrants Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.18+

Master Manufacturing Agreement between Vintage Pharmaceuticals,
    LLC and Cornerstone BioPharma, Inc. (formerly known as
    Cornerstone Pharmaceuticals, Inc.) dated July 20, 2004
    (incorporated by reference to Exhibit 10.5 to the
    Registrants Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).




---



##### Table of Contents



Exhibit No.

Description10
.19+

License Agreement between the Registrant and Abbott Laboratories
    dated December 18, 2003 (incorporated by reference to
    Exhibit 10.10 to the Registrants Registration
    Statement on
    Form S-1
    (SEC File
    No. 333-113727)).10
.20

Amendment No. 1, dated April 13, 2005, to License
    Agreement between the Registrant and Abbott Laboratories dated
    December 18, 2003 (incorporated by reference to
    Exhibit 10.14 to the Registrants Annual Report on
    Form 10-K
    for the year ended December 31, 2006 (SEC File
    No. 000-50767)).10
.21+

License Agreement between the Registrant and Abbott Laboratories
    dated March 17, 2004 (incorporated by reference to
    Exhibit 10.11 to the Registrants Registration
    Statement on
    Form S-1
    (SEC File
    No. 333-113727)).10
.22

Amendment No. 1, dated September 15, 2004, to License
    Agreement between the Registrant and Abbott Laboratories dated
    March 19, 2004 (incorporated by reference to
    Exhibit 10.16 to the Registrants Annual Report on
    Form 10-K
    for the year ended December 31, 2006 (SEC File
    No. 000-50767)).10
.23+

Agreement between the Registrant and Jagotec AG dated
    December 3, 2003 (incorporated by reference to
    Exhibit 10.13 to the Registrants Registration
    Statement on
    Form S-1
    (SEC File
    No. 333-113727)).10
.24+

Development and
    Scale-Up
    Agreement between the Registrant and Jagotec AG dated
    May 5, 2004 (incorporated by reference to
    Exhibit 10.25 to Amendment No. 2 to the
    Registrants Registration Statement on
    Form S-1
    (SEC File
    No. 333-113727)).10
.25+

Patent License Agreement between Pharmaceutical Innovations, LLC
    and Cornerstone BioPharma, Inc. effective as of August 31,
    2006 (incorporated by reference to Exhibit 10.12 to the
    Registrants Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.26+

Amendment No. 1, dated August 10, 2007, to Patent
    License Agreement between Pharmaceutical Innovations, LLC and
    Cornerstone BioPharma, Inc. effective as of August 31, 2006
    (incorporated by reference to Exhibit 10.13 to the
    Registrants Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.27

Amendment No. 2, dated February 15, 2008, to Patent
    License Agreement between Pharmaceutical Innovations, LLC and
    Cornerstone BioPharma, Inc. effective as of August 31, 2006
    (incorporated by reference to Exhibit 10.14 to the
    Registrants Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.28+

Development, License and Services Agreement between Neos
    Therapeutics, L.P. and Cornerstone BioPharma, Inc. dated
    March 19, 2008 (incorporated by reference to
    Exhibit 10.15 to the Registrants Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.29+

Development and Manufacturing Agreement by and among Neos
    Therapeutics, L.P., Coating Place, Inc. and Cornerstone
    BioPharma, Inc. dated February 27, 2008 (incorporated by
    reference to Exhibit 10.16 to the Registrants Current
    Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.30+

Amended and Restated Products Development Agreement between
    Neos Therapeutics, L.P. and Cornerstone BioPharma, Inc. dated
    August 27, 2008 (incorporated by reference to
    Exhibit 10.17 to the Registrants Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.31+

Supply and Marketing Agreement between Sovereign
    Pharmaceuticals, Ltd. and Aristos Pharmaceuticals, Inc. dated
    May 1, 2008 (incorporated by reference to
    Exhibit 10.18 to the Registrants Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.32+

Asset Purchase Agreement between Vintage Pharmaceuticals, LLC
    and Cornerstone BioPharma, Inc. (as assignee of Cornerstone
    Biopharma, Ltd. (formerly known as Cornerstone Pharmaceuticals
    Ltd.)) dated July 20, 2004 (incorporated by reference to
    Exhibit 10.19 to the Registrants Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.33

Amendment No. 1, dated May 20, 2005, to Asset Purchase
    Agreement between Vintage Pharmaceuticals, LLC and Cornerstone
    BioPharma, Inc. (as assignee of Cornerstone Biopharma Ltd.
    (formerly known as Cornerstone Pharmaceuticals Ltd.)) dated
    July 20, 2004 (incorporated by reference to
    Exhibit 10.20 to the Registrants Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).




---



##### Table of Contents



Exhibit No.

Description10
.34

Amendment No. 2, dated November 16, 2005, to Asset
    Purchase Agreement between Vintage Pharmaceuticals, LLC and
    Cornerstone BioPharma, Inc. (as assignee of Cornerstone
    Biopharma Ltd. (formerly known as Cornerstone Pharmaceuticals
    Ltd.)) dated July 20, 2004 (incorporated by reference to
    Exhibit 10.21 to the Registrants Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.35

Amendment No. 2, dated November 13, 2006, to Asset
    Purchase Agreement between Vintage Pharmaceuticals, LLC and
    Cornerstone BioPharma, Inc. (as assignee of Cornerstone
    Biopharma Ltd. (formerly known as Cornerstone Pharmaceuticals
    Ltd.)) dated July 20, 2004 (incorporated by reference to
    Exhibit 10.22 to the Registrants Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.36

Amendment No. 3, dated December 7, 2006, to Asset
    Purchase Agreement between Vintage Pharmaceuticals, LLC and
    Cornerstone BioPharma, Inc. (as assignee of Cornerstone
    Biopharma Ltd. (formerly known as Cornerstone Pharmaceuticals
    Ltd.)) dated July 20, 2004 (incorporated by reference to
    Exhibit 10.23 to the Registrants Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.37+

License Agreement between the Registrant and The Feinstein
    Institute for Medical Research (formerly known as The North
    Shore-Long Island Jewish Research Institute) dated July 1,
    2001, as amended by the First Amendment Agreement dated
    May 15, 2003 (incorporated by reference to
    Exhibit 10.5 to the Registrants Registration
    Statement on
    Form S-1
    (SEC File
    No. 333-113727)).10
.38+

Sponsored Research and License Agreement between the Registrant
    and The Feinstein Institute for Medical Research (formerly known
    as The North Shore-Long Island Jewish Research Institute) dated
    July 1, 2001, as amended by the First Amendment Agreement
    dated July 1, 2003 (incorporated by reference to
    Exhibit 10.6 to the Registrants Registration
    Statement on
    Form S-1
    (SEC File
    No. 333-113727)).10
.39+

Sponsored Research and License Agreement between the Registrant
    and The Feinstein Institute for Medical Research (formerly known
    as The North Shore-Long Island Jewish Research Institute)
    effective as of January 1, 2003 (incorporated by reference
    to Exhibit 10.7 to the Registrants Registration
    Statement on
    Form S-1
    (SEC File
    No. 333-113727)).10
.40+

Amendment No. 2, dated January 8, 2007, to Sponsored
    Research and License Agreement between the Registrant and The
    Feinstein Institute for Medical Research (formerly known as The
    North Shore-Long Island Jewish Research Institute) effective as
    of  January 1, 2003 (incorporated by reference to
    Exhibit 10.8 to the Registrants Annual Report on
    Form 10-K
    for the year ended December 31, 2006 (SEC File
    No. 000-50767)).10
.41+

Amendment No. 3, dated June 29, 2007, to Sponsored
    Research and License Agreement effective as of January 1,
    2003, between the Registrant and The Feinstein Institute for
    Medical Research. (incorporated by reference to
    Exhibit 10.7 to the Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 2007 (SEC File
    No. 000-50767)).10
.42+

Exclusive License and Collaboration Agreement between the
    Registrant and MedImmune, Inc. dated July 30, 2003
    (incorporated by reference to Exhibit 10.8 to the
    Registrants Registration Statement on
    Form S-1
    (SEC File
    No. 333-113727)).10
.43

Amendment No. 1, dated December 7, 2005, to Exclusive
    License and Collaboration Agreement between MedImmune, Inc. and
    the Registrant dated July 30, 2003 (incorporated by
    reference to Exhibit 10.50 to the Registrants Annual
    Report on
    Form 10-K
    for the year ended December 31, 2005 (SEC File
    No. 000-50767)).10
.44+

License Agreement between the Registrant and Beckman Coulter,
    Inc. dated January 10, 2005 (incorporated by reference to
    Exhibit 10.1 to the Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended March 31, 2005 (SEC File
    No. 000-50767)).10
.45+

License and Supply Agreement between CyDex, Inc. and the
    Registrant dated May 16, 2007 (incorporated by reference to
    Exhibit 10.3 to the Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 2007 (SEC File
    No. 000-50767)).10
.46+

Exclusive License Agreement between the Registrant and
    Innovative Metabolics, Inc. dated January 29, 2007
    (incorporated by reference to Exhibit 99.1 to the
    Registrants Current Report on
    Form 8-K
    dated January 29, 2007 (SEC File
    No. 000-50767)).




---



##### Table of Contents



Exhibit No.

Description10
.47+

First Amendment, dated June 29, 2007, to Exclusive License
    Agreement between the Registrant and Innovative Metabolics, Inc.
    dated January 29, 2007 (incorporated by reference to
    Exhibit 10.6 to the Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 2007 (SEC File
    No. 000-50767)).10
.48

Feasibility Study Agreement between Baxter Healthcare
    Corporation and the Registrant effective as of June 9, 2004
    (incorporated by reference to Exhibit 10.25 to the
    Registrants Annual Report on
    Form 10-K
    for the year ended December 31, 2004 (SEC File
    No. 000-50767)).10
.49

Commercial Note issued by Cornerstone BioPharma Holdings, Inc.
    to Paragon Commercial Bank dated April 21, 2005
    (incorporated by reference to Exhibit 10.41 to the
    Registrants Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.50

Security Agreement by Cornerstone BioPharma Holdings, Inc. in
    favor of Paragon Commercial Bank dated April 21, 2005
    (incorporated by reference to Exhibit 10.42 to the
    Registrants Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.51

Modification Agreement among Paragon Commercial Bank,
    Cornerstone BioPharma Holdings, Inc., Charles W. Cleary (as
    trustee), Carolina Pharmaceuticals, Inc. (as guarantor) and
    Craig A. Collard (as guarantor) dated April 10, 2006
    (incorporated by reference to Exhibit 10.43 to the
    Registrants Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.52

Modification Agreement among Paragon Commercial Bank,
    Cornerstone BioPharma Holdings, Inc., Charles W. Cleary (as
    trustee), Carolina Pharmaceuticals, Inc. (as guarantor) and
    Craig A. Collard (as guarantor) dated July 31, 2007
    (incorporated by reference to Exhibit 10.44 to the
    Registrants Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.53

Letter Agreement among Paragon Commercial Bank, Cornerstone
    BioPharma Holdings, Inc., Craig A. Collard (as guarantor),
    Aristos Pharmaceuticals, Inc. (as guarantor) and Cornerstone
    BioPharma, Inc. (as guarantor) dated June 23, 2008
    (incorporated by reference to Exhibit 10.45 to the
    Registrants Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.54

Modification Agreement among Paragon Commercial Bank,
    Cornerstone BioPharma Holdings, Inc., John S. Towles (as
    trustee), Craig A. Collard (as guarantor), Aristos
    Pharmaceuticals, Inc. (as guarantor) and Cornerstone BioPharma,
    Inc. (as guarantor) dated June 25, 2008 (incorporated by
    reference to Exhibit 10.46 to the Registrants Current
    Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.55

Unconditional Guaranty by Cornerstone BioPharma, Inc. in favor
    Paragon Commercial Bank dated June 25, 2008 (incorporated
    by reference to Exhibit 10.47 to the Registrants
    Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.56

Security Agreement by Cornerstone BioPharma, Inc. and
    Cornerstone BioPharma Holdings, Inc. in favor of Paragon
    Commercial Bank dated June 25, 2008 (incorporated by
    reference to Exhibit 10.48 to the Registrants Current
    Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.57

Unconditional Guaranty by Aristos Pharmaceuticals, Inc. in favor
    of Paragon Commercial Bank dated June 25, 2008
    (incorporated by reference to Exhibit 10.49 to the
    Registrants Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.58

Security Agreement by Aristos Pharmaceuticals, Inc. and
    Cornerstone BioPharma Holdings, Inc. in favor of Paragon
    Commercial Bank dated June 25, 2008 (incorporated by
    reference to Exhibit 10.50 to the Registrants Current
    Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.59

Letter from Paragon Commercial Bank to Cornerstone BioPharma
    Holdings, Inc. dated October 29, 2008 (incorporated by
    reference to Exhibit 10.51 to the Registrants Current
    Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.60

Warrant Agreement between the Registrant and Mellon Investor
    Services LLC as Warrant Agent, dated June 20, 2005
    (incorporated by reference to Exhibit 99.1 to the
    Registrants Current Report on
    Form 8-K
    dated June 20, 2005 (SEC File
    No. 000-50767)).10
.61

Form of Warrant (Included in Exhibit 10.60 hereto).10
.62

Warrant Agreement dated October 31, 2006 by and between the
    Registrant and Mellon Investor Services (incorporated by
    reference to Exhibit 10.2 to the Registrants
    Quarterly Report on
    Form 10-Q
    for the period ended September 30, 2006 (SEC File
    No. 000-50767)).




---



##### Table of Contents



Exhibit No.

Description10
.63

Lease Agreement between Regency Park Corporation and Cornerstone
    BioPharma, Inc. dated August 11, 2004 (incorporated by
    reference to Exhibit 10.24 to the Registrants Current
    Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.64

Addendum No. 1, dated January 18, 2005, to Lease
    Agreement between Regency Park Corporation and Cornerstone
    BioPharma, Inc. dated August 11, 2004 (incorporated by
    reference to Exhibit 10.25 to the Registrants Current
    Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.65

Lease Agreement between Crescent Lakeside, LLC and Cornerstone
    BioPharma Holdings, Inc. dated May 1, 2008 (incorporated by
    reference to Exhibit 10.26 to the Registrants Current
    Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.66#

2004 Stock Incentive Plan of the Registrant (incorporated by
    reference to Exhibit 10.3 to Amendment No. 2 to the
    Registrants Registration Statement on
    Form S-1
    (SEC File
    No. 333-113727)).10
.67#

Amendment No. 1 to the 2004 Stock Incentive Plan of the
    Registrant (incorporated by reference to Exhibit 10.4 to
    the Registrants Annual Report on
    Form 10-K
    for the year ended December 31, 2005 (SEC File
    No. 000-50767)).10
.68#

Form of Incentive Stock Option Agreement granted under 2004
    Stock Incentive Plan applicable to awards made after
    October 31, 2008.10
.69#

Form of Incentive Stock Option Agreement granted under 2004
    Stock Incentive Plan applicable to awards made on or before
    October 31, 2008 (incorporated by reference to
    Exhibit 10.26 to the Registrants Annual Report on
    Form 10-K
    for the year ended December 31, 2004 (SEC File
    No. 000-50767)).10
.70#

Form of Nonstatutory Stock Option Agreement granted under 2004
    Stock Incentive Plan applicable to awards made after
    October 31, 2008.10
.71#

Form of Nonstatutory Stock Option Agreement granted under 2004
    Stock Incentive Plan applicable to awards made on or before
    October 31, 2008 (incorporated by reference to
    Exhibit 10.27 to the Registrants Annual Report on
    Form 10-K
    for the year ended December 31, 2004 (SEC File
    No. 000-50767)).10
.72#

Form of Nonstatutory Stock Option Agreement for a Non-Employee
    Director granted under the 2004 Stock Incentive Plan applicable
    to awards made after October 31, 2008.10
.73#

Form of Nonstatutory Stock Option Agreement for a Non-Employee
    Director granted under the 2004 Stock Incentive Plan applicable
    to awards made on or before October 31, 2008 (incorporated
    by reference to Exhibit 10.29 to the Registrants
    Annual Report on
    Form 10-K
    for the year ended December 31, 2004 (SEC File
    No. 000-50767)).10
.74#

Form of Restricted Stock Agreement granted under 2004 Stock
    Incentive Plan, as amended (incorporated by reference to
    Exhibit 99.1 to the Registrants Current Report on
    Form 8-K
    dated December 19, 2006 (SEC File
    No. 000-50767)).10
.75#

Cornerstone BioPharma Holdings, Inc. 2005 Stock Incentive Plan
    (as Amended and Restated effective October 31, 2008)
    (incorporated by reference to Exhibit 10.37 to the
    Registrants Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.76#

Form of Nonstatutory Stock Option Agreement Granted Under the
    Cornerstone BioPharma Holdings, Inc. 2005 Stock Incentive Plan
    (incorporated by reference to Exhibit 10.39 to the
    Registrants Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.77#

Cornerstone BioPharma Holdings, Inc. 2005 Stock Option Plan (as
    Amended and Restated effective October 31, 2008)
    (incorporated by reference to Exhibit 10.38 to the
    Registrants Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.78#

Form of Nonstatutory Employee Stock Option Agreement Granted
    Under the Cornerstone BioPharma Holdings, Inc. 2005 Stock Option
    Plan (incorporated by reference to Exhibit 10.40 to the
    Registrants Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.79#

Non-Employee Director Compensation and Reimbursement Policy of
    the Registrant applicable prior to October 31, 2008
    (incorporated by reference to Exhibit 10.38 to the
    Registrants Annual Report on
    Form 10-K
    for the year ended December 31, 2006 (SEC File
    No. 000-50767)).10
.80#

Amended and Restated Non-Employee Director Compensation and
    Reimbursement Policy of the Registrant effective
    October 31, 2008.




---



##### Table of Contents



Exhibit No.

Description10
.81#

Agreement Regarding Employment, Employee Duties, Ownership of
    Employee Developments, and Confidentiality between Cornerstone
    BioPharma, Inc. and Joshua B. Franklin dated September 29,
    200810
.82#

Form of Letter Agreement for the Registrants Change
    of Control Cash Bonus Program, dated as of July 17,
    2008, including a Schedule of Material Terms (incorporated by
    reference to Exhibit 10.54 to the Registrants
    Registration Statement on
    Form S-4/A
    dated August 28, 2008 (SEC File
    No. 333-152442)).10
.83#

Executive Employment Agreement between Cornerstone BioPharma,
    Inc. and Craig A. Collard dated March 1, 2006 (incorporated
    by reference to Exhibit 10.27 to the Registrants
    Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.84#

Executive Retention Agreement between Cornerstone BioPharma,
    Inc. and Craig A. Collard dated February 8, 2006
    (incorporated by reference to Exhibit 10.28 to the
    Registrants Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.85#

Executive Employment Agreement between Cornerstone BioPharma,
    Inc. and Chenyqua Baldwin dated March 1, 2006 (incorporated
    by reference to Exhibit 10.29 to the Registrants
    Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.86#

Executive Employment Agreement between Cornerstone BioPharma,
    Inc. and Brian Dickson dated March 1, 2006 (incorporated by
    reference to Exhibit 10.30 to the Registrants Current
    Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.87#

Letter Agreement between Cornerstone BioPharma, Inc. and Joshua
    B. Franklin dated September 12, 200810
.88#

Executive Employment Agreement between Cornerstone BioPharma,
    Inc. and Steven Lutz dated March 1, 2006 (incorporated by
    reference to Exhibit 10.32 to the Registrants Current
    Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.89#

Executive Employment Agreement between Cornerstone BioPharma
    Holdings, Inc. and David Price dated August 20, 2008
    (incorporated by reference to Exhibit 10.33 to the
    Registrants Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.90#

Amended and Restated Restricted Stock Agreement between
    Cornerstone BioPharma Holdings, Inc. and David Price dated
    October 31, 2008 (incorporated by reference to
    Exhibit 10.34 to the Registrants Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.91#

Amended and Restated Employment Agreement dated November 6,
    2007 by and between the Registrant and Scott B. Townsend
    (incorporated by reference to Exhibit 10.6 to the
    Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended September 30, 2007 (SEC File
    No. 000-50767)).10
.92#

First Amendment to Amended and Restated Employment Agreement,
    dated as of September 16, 2008, by and between the
    Registrant and Scott B. Townsend (incorporated by reference to
    Exhibit 10.55 to the Registrants Registration
    Statement on
    Form S-4/A
    dated September 18, 2008 (SEC File
    No. 333-152442)).10
.93#

Restricted Stock Agreement dated as of September 16, 2008
    between the Registrant and Scott B. Townsend.10
.94#

Amended and Restated Employment Agreement dated April 1,
    2008 by and between the Registrant and Trevor
    Phillips, Ph.D. (incorporated by reference to
    Exhibit 99.1 to the Registrants Amendment No. 1
    on
    Form 8-K/A
    to Current Report on
    Form 8-K
    dated March 2, 2008 (SEC File
    No. 000-50767)).10
.95#

Amended and Restated Employment Agreement dated November 5,
    2007 by and between the Registrant and Frank E. Thomas
    (incorporated by reference to Exhibit 10.4 to the
    Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended September 30, 2007 (SEC File
    No. 000-50767)).10
.96#

Employment Agreement, dated August 21, 2007 by and between
    the Registrant and Thomas P. Kelly (incorporated by reference to
    Exhibit 99.1 to the Registrants Current Report on
    Form 8-K
    dated August 20, 2007 (SEC File
    No. 000-50767)).




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##### Table of Contents



Exhibit No.

Description10
.97#

Amended and Restated Employment Agreement dated November 5,
    2007 by and between the Registrant and Jeffrey E. Young
    (incorporated by reference to Exhibit 10.7 to the
    Registrants Quarterly Report on
    Form 10-Q
    for the quarter ended September 30, 2007 (SEC File
    No. 000-50767)).10
.98#

Form of Proprietary Information, Inventions, Non-Competition and
    Non-Solicitation Agreement, entered into between Cornerstone
    BioPharma, Inc. and each of Craig A. Collard, Chenyqua Baldwin,
    Brian Dickson, Steven Lutz and Alastair McEwan (incorporated by
    reference to Exhibit 10.35 to the Registrants Current
    Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).10
.99#

Agreement Regarding Employment, Employee Duties, Ownership of
    Employee Developments, and Confidentially between Cornerstone
    BioPharma, Inc. and George Esgro dated March 3, 2008
    (incorporated by reference to Exhibit 10.31 to the
    Registrants Current Report on Form 8-K dated
    October 30, 2008 (SEC File No. 000-50767)).10
.100#

Severance Agreement and General Release between George Esgro and
    the Registrant dated December 22, 2008 (incorporated by
    reference to Exhibit 10.1 to the Registrants Current
    Report on Form 8-K dated December 22, 2008 (SEC File
    No. 000-50767))10
.101#

Form of Indemnification Agreement, entered into between
    Cornerstone BioPharma Holdings, Inc. and each of Craig Collard
    and Alastair McEwan (incorporated by reference to
    Exhibit 10.36 to the Registrants Current Report on
    Form 8-K
    dated October 30, 2008 (SEC File
    No. 000-50767)).21
.1

Subsidiaries of the Registrant.23
.1

Consent of Grant Thornton LLP.31
.1

Certification of Principal Executive Officer pursuant to
    Rule 13a-14(a)
    and 15d-14(a) of the Securities Exchange Act of 1934, as adopted
    pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31
.2

Certification of Principal Financial Officer pursuant to
    Rule 13a-14(a)
    and 15d-14(a) of the Securities Exchange Act of 1934, as adopted
    pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32
.1

Certification of Principal Executive Officer pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.32
.2

Certification of Principal Financial Officer pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.     #
    
    Management contract or compensation plan or arrangement.+
    
    Confidential treatment granted as to certain portions, which
    portions have been omitted and separately filed with the
    Securities and Exchange Commission.