----

----

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

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

|  Delaware                             |   |   83-0221517                |
|--------------------------------------------|--------|--------------------------------------------|
|  (State or      other jurisdiction of |   |  (I.R.S. Employer      I.D. No.) |
|  incorporation      or organization)  |   |                                       |

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

----

|                                      |                           |  Page      No.                                                                                                             |
|-------------------------------------------|--------------------------------|---------------------------------------------------------------------------------------------------------------------------------|
|  PART I - FINANCIAL      INFORMATION |
|                                      |                           |                                                                                                                            |   |
|                                      |  Item      1.        |  Financial      Statements:                                                                                                |   |
|                                      |                           |                                                                                                                            |   |
|                                      |                           |  Condensed      Consolidated Balance Sheets at                                                                             |   |
|                                      |                           |  June 30, 2008      (unaudited) and December 31, 2007      (audited)          |  12 |
|                                      |                           |                                                                                                                            |   |
|                                      |                           |  Condensed      Consolidated Statements of Operations (unaudited) for the                                                  |   |
|                                      |                           |  three and six      months ended June 30, 2008 and June 30, 2007                                                 |  13 |
|                                      |                           |                                                                                                                            |   |
|                                      |                           |  Condensed      Consolidated Statements of Cash Flows (unaudited) for the                                                  |   |
|                                      |                           |  six months      ended June 30, 2008 and June 30, 2007                                                                     |  14 |
|                                      |                           |                                                                                                                            |   |
|                                      |                           |  Notes to      Unaudited Condensed Consolidated Financial Statements                                                  |  15 |
|                                      |                           |                                                                                                                            |   |
|                                      |   Item      2.  |  Management's      Discussion and Analysis of Financial Condition and                                                      |   |
|                                      |                           |  Results of      Operations                                                                                 |  2 |
|                                      |                           |                                                                                                                            |   |
|                                      |  Item      4T.       |  Controls and      Procedures                                                                                         |  7 |
|                                      |                           |                                                                                                                            |   |
|                                      |                           |                                                                                                                            |   |
|                                      |                           |                                                                                                                            |   |
|  PART II -      OTHER INFORMATION    |                           |
|                                      |                           |                                                                                                                            |   |
|                                      |  Item      1         |  Legal      Proceedings                                                                                          |  8 |
|                                      |                           |                                                                                                                            |   |
|                                      |  Item      1A        |  Risk      Factors                                                                                               |  8 |
|                                      |                           |                                                                                                                            |   |
|                                      |  Item      2         |  Unregistered      Sales of Equity Securities and Use of Proceeds                                                          |  9 |
|                                      |                           |                                                                                                                            |   |
|                                      |  Item    3                |  Defaults Under      Senior Securities                                                                                     |  9 |
|                                      |                           |                                                                                                                            |   |
|                                      |  Item      4         |  Submission of      Matters to a Vote of Security Holders                                                             |  9 |
|                                      |                           |                                                                                                                            |   |
|                                      |  Item      5         |  Other      Information                                                                                               |  10 |
|                                      |                           |                                                                                                                            |   |
|                                      |  Item      6.        |  Exhibits                                                                                                                  |  10 |
|                                      |                           |                                                                                                                            |   |
|   SIGNATURES          |  11                       |
|                                      |                           |                                                                                                                            |   |
|  CERTIFICATIONS                      |                           |                                                                                                                            |
|                                      |                           |                                                                                                                            |   |
|                                      |                           |                                                                                                                            |   |

----

| ITEM      2 | MANAGEMENT'S      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF      OPERATIONS |
|-------------|-------------------------------------------------------------------------------------------------|

----

| ·   | MuGard™      is our approved product for the management of oral mucositis, a frequent      side-effect of cancer therapy for which there is no established treatment.      The market for mucositis treatment is estimated to be in excess of $1      billion world-wide. MuGard, a proprietary nanopolymer formulation, has      received marketing allowance in the U.S. from the Food & Drug      Administration (“FDA”). |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Our      lead development candidate for the treatment of cancer is ProLindac™, a      nanopolymer DACH-platinum prodrug. ProLindac is currently in a Phase 2      clinical trial being conducted in the EU in patients with ovarian cancer.      The DACH-platinum incorporated in ProLindac is the same active moiety as      that in oxaliplatin (Eloxatin; Sanofi-Aventis), which has sales in excess      of $2.0 billion. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Pre-clinical      development of Cobalamin™, our proprietary nanopolymer oral drug delivery      technology which is based on the natural vitamin B12 uptake mechanism. We      are currently developing a product for the oral delivery of      insulin. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Pre-clinical      development of Angiolix®, a humanized monoclonal antibody which acts as an      anti-angiogenesis factor and is targeted to cancer cells, notably breast,      ovarian and colorectal cancers. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Pre-clinical      development of Prodrax®, a non-toxic prodrug which is activated in the      hypoxic zones of solid tumors to kill cancer  cells. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Pre-clinical      development of Alchemix®, a chemotherapeutic agent that combines multiple      modes of action to overcome drugresistance. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Pre-clinical      development of Cobalamin-mediated targeted  delivery. |
|--------------------|-------------------------------------------------------------------------|

| ·   | Phenylbutyrate      (“PB”), an HDAC inhibitor and a differentiating agent, is currently      contemplated as a Phase 2 clinical candidate in collaboration with      MacroChem Corporation. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Compound                                                                     |   | Originator                            |   |  Technology                  |   | Indication |   | ClinicalStage (1)                       |
|------------------------------------------------------------------------------|--------|---------------------------------------|--------|-----------------------------------|--------|------------|--------|-----------------------------------------|
|                                                                         |   |                                  |   |                              |   |       |   |                                    |
| MuGard™                                                                |   | Access                                |   | Mucoadhesiveliquid                |   | Mucositis  |   | Marketing      clearance received  |
| ProLindacTM      (Polymer   Platinate,      AP5346) (2)  |   | Access      – U London          |   | Syntheticpolymer                  |   | Cancer     |   | Phase      2                            |
| Phenylbutyrate      (PB)                                                |   | NationalInstituteof      Health  |   | Smallmolecule                     |   | Cancer     |   | Phase      2                            |
| Oral      Insulin                                                       |   | Access                                |   | Cobalamin                         |   | Diabetes   |   | Pre-clinical                            |
| Oral      Delivery System                                               |   | Access                                |   | Cobalamin                         |   | Various    |   | Pre-clinical                            |
| Angiolix®                                                          |   | Immunodex,Inc.                   |   | Humanizedmonoclonalantibody  |   | Cancer     |   | Pre-clinical                            |
| Prodrax®                                                           |   | UnivLondon                       |   | Smallmolecule                     |   | Cancer     |   | Pre-clinical                            |
| Alchemix®                                                          |   | DeMontfordUniv                   |   | Smallmolecule                     |   | Cancer     |   | Pre-clinical                            |
| Cobalamin-Targeted      Therapeutics                                         |   | Access                                |   | Cobalamin                         |   | Anti-tumor |   | Pre-clinical                            |
|                                                                         |   |                                  |   |                              |   |       |   |                                    |

| (1)   | For      more information, see “Government Regulation” in our Form 10-K for the      fiscal year ended December 31, 2007 for a description of clinical      stages. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Licensed      from the School of Pharmacy, The University of London. Subject to a 1%      royalty and milestone payments onsales. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------|

----

----

| ·   | costs      for product manufacturing for a new ProLindac clinical trial expected to      start in mid 2008 ($513,000); |
|--------------------|------------------------------------------------------------------------------------------------------------------------|

| ·   | higher      scientific consulting expenses($95,000); |
|--------------------|------------------------------------------------------|

| ·   | higher      salary and related cost due to the hiring of additional scientific staff      ($82,000); |
|--------------------|------------------------------------------------------------------------------------------------------|

| ·   | lower      clinical trial costs this quarter ($58,000);and |
|--------------------|------------------------------------------------------------|

| ·   | other      net increases in research spending($24,000). |
|--------------------|---------------------------------------------------------|

| ·   | lower      salary related expenses due to stock option expenses      ($237,000); |
|--------------------|----------------------------------------------------------------------------------|

| ·   | higher      patent expenses ($197,000); and |
|--------------------|---------------------------------------------|

| ·   | other      net decreases in general and administrative expenses      ($29,000). |
|--------------------|---------------------------------------------------------------------------------|

----

| ·   | the      Somanta acquisition resulted in a one-time non-cash in-process research      and development expense in the first quarter of 2008      ($8,879,000); |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | costs      for product manufacturing for a new ProLindac clinical trial expected to      start in mid 2008 ($826,000); |
|--------------------|------------------------------------------------------------------------------------------------------------------------|

| ·   | higher      scientific consulting expenses($154,000); |
|--------------------|-------------------------------------------------------|

| ·   | higher      salary and related cost due to the hiring of additional scientific staff      ($114,000); and |
|--------------------|-----------------------------------------------------------------------------------------------------------|

| ·   | other      net decreases in research spending($85,000). |
|--------------------|---------------------------------------------------------|

| ·   | lower      salary related expenses due to stock option expenses      ($470,000); |
|--------------------|----------------------------------------------------------------------------------|

| ·   | lower      salary and other salary related expenses  ($49,000); |
|--------------------|-----------------------------------------------------------------|

| ·   | higher      patent expenses ($148,000); |
|--------------------|-----------------------------------------|

|  | ·  |  higher      general business consulting expenses ($68,000);  and |
|--|--------------|------------------------------------------------------------------------|

| ·   | other      net decreases in general and administrative expenses      ($16,000). |
|--------------------|---------------------------------------------------------------------------------|

----

----

----

| ITEM      2 | UNREGISTERED      SALES OF EQUITY SECURITIES AND USE OFPROCEEDS |
|-------------|-----------------------------------------------------------------|

|   | —          Two directors were re-elected for three years terms with the following      votes: |
|--------|-------------------------------------------------------------------------------------------------------------------------|

|   | — | A      proposal to amend the Company’s Certificate of Incorporation to make      certain changes to the terms of the Company’s outstanding Series A      Preferred Stock was approved by the holders of Series A Preferred Stock      9,070,165- For; 0- Against; 0- Abstain; and 2,230,820- Broker Non-votes      (each on an as converted basis) along with a combined 10,839,501- For;      102,899- Against; 21,895- Abstain; and 2,230,820- Broker Non-votes (Series      A Preferred Stock voting together with common stock on an as converted      basis). |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | — | A      proposal to amend our 2005 Equity Incentive Plan, to increase the number      of shares authorized for issuance was approved with 10,813,053- For;      146,174- Against; 5,068- Abstain; and 2,230,820- Broker      Non-votes. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | — | A      proposal to ratify the appointment of Whitley Penn LLP as independent      certified public accounts for the Company for the fiscal year ending      December 31, 2008 was approved with 13,151,524- For; 11,340- Against; and      32,251- Abstain. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ITEM      6 | EXHIBITS |
|-------------|----------|

| 2.2 | Agreement      and Plan of Merger, by and among Access Pharmaceuticals, Inc., Somanta      Acquisition Corporation, Somanta Pharmaceuticals, Inc., Somanta      Incorporated and Somanta Limited, dated April 18, 2007. (Incorporated by      reference to Exhibit 2.1 to our Form 8-K dated April 18,    2007) |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.3 | Agreement      and Plan of Merger, by and among Access Pharmaceuticals, Inc., MACM      Acquisition Corporation and MacroChem Corporation, dated July 9,      2008. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.1 | Certificate      of Incorporation (Incorporated by Reference to Exhibit 3(a) of our Form      8-B dated July 12, 1989, Commission File Number  9-9134) |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.3 | Certificate      of Merger filed January 25, 1996. (Incorporated by reference to Exhibit E      of our Registration Statement on Form S-4 dated December 21, 1995,      Commission File No. 33-64031) |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.4 | Certificate      of Amendment of Certificate of Incorporation filed January 25, 1996.      (Incorporated by reference to Exhibit E of our Registration Statement on      Form S-4 dated December 21, 1995, Commission File No.      33-64031) |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.5 | Certificate      of Amendment of Certificate of Incorporation filed July 18, 1996.      (Incorporated by reference to Exhibit 3.8 of our Form 10-K for the year      ended December 31, 1996) |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.6 | Certificate      of Amendment of Certificate of Incorporation filed June 18, 1998.      (Incorporated by reference to Exhibit 3.8 of our Form 10-Q for the quarter      ended June 30, 1998) |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.7   | Certificate      of Amendment of Certificate of Incorporation filed July 31, 2000.      (Incorporated by reference to Exhibit 3.8 of our Form 10-Q for the quarter      ended March 31, 2001) |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.8 | Certificate      of Designations of Series A Junior Participating Preferred Stock filed      November 7, 2001 (Incorporated by reference to Exhibit 4.1.h of our      Registration Statement on Form S-8, dated December 14, 2001, Commission      File No. 333-75136) |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.9 | Amended      and Restated Bylaws (Incorporated by reference to Exhibit 3.1 of our Form      10-Q for the quarter ended June 30,1996) |
|-----|--------------------------------------------------------------------------------------------------------------------------------------|

| 3.10 | Certificate      of Designations, Rights and Preferences of Series A Cumulative Convertible      Preferred Stock (Incorporated by reference to Exhibit 3.10 to our Form      10-K for the year ended December 31,2007) |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.11 | Certificate      of Amendment to Certificate of Designations, Rights and Preferences of      Series A Cumulative Convertible Preferred Stock filed June 11,      2008 |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 31.1 | Certification      of Chief Executive Officer of Access Pharmaceuticals, Inc. pursuant to      Rule 13a-14(a)/15d-14(a) |
|------|-------------------------------------------------------------------------------------------------------------------------|

| 31.2 | Certification      of Chief Financial Officer of Access Pharmaceuticals, Inc. pursuant to      Rule 13a-14(a)/15d-14(a) |
|------|-------------------------------------------------------------------------------------------------------------------------|

| 32.1* | Certification      of Chief Executive Officer of Access Pharmaceuticals, Inc. pursuant to 18      U.S.C. Section 1350 |
|-------|-----------------------------------------------------------------------------------------------------------------------|

| 32.2* | Certification      of Chief Financial Officer of Access Pharmaceuticals, Inc. pursuant to 18      U.S.C. Section 1350 |
|-------|-----------------------------------------------------------------------------------------------------------------------|

----

| Date:  | August 14, 2008 | By:                                              | /s/ Jeffrey B. Davis    |
|--------|-----------------|--------------------------------------------------|-------------------------|
|   |            | Jeffrey      B. Davis                            |
|   |            | Chief      Executive Officer                     |
|   |            | (Principal      Executive Officer)               |
|   |            |                                             |
| Date:  | August 14, 2008 | By:                                              | /s/ Stephen B. Thompson |
|   |            | Stephen      B. Thompson                         |
|   |            | Vice      President and Chief Financial Officer  |
|   |            | (Principal      Financial and Accounting Officer |
|   |            |                                             |

----

|                            ASSETS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | June 30,      2008(unaudited)                                                                                                |   |  December 31,      2007(audited)                                                                                                                                                                                                                                  |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Current      assetsCash and cash      equivalents   Short      term investments, at cost   ReceivablesReceivables due from Somanta      Pharmaceuticals   Prepaid      expenses and other current assets         Total      current assets                                                                                                                                                                                                                                                                                                                                                                                                              |  $             96,0005,792,000105,000-165,0006,158,000 |   |  $           159,0006,762,000             35,000931,000           410,0008,297,000 |
| Property      and equipment, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 124,000                                                                                                                      |   | 130,000                                                                                                                                                                                                                                                                |
| Patents,      net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 626,000                                                                                                                      |   | 710,000                                                                                                                                                                                                                                                                |
| Other      assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 12,000                                                                                                                       |   | 12,000                                                                                                                                                                                                                                                                 |
|             Total      assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | $        6,920,000                                                                   |   | $        9,149,000                                                                                                                                                                                                             |
|         LIABILITIES      AND STOCKHOLDERS' EQUITY (DEFICIT)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                         |   |                                                                                                                                                                                                                                                                   |
| Current      liabilities  Accounts      payable and accrued expenses  Dividends      payable  Accrued      interest payable  Current      portion of deferred revenue  Current      portion of long-term debt               Total      current liabilities                                                                                                                                                                                                                                                                                                                                                           |  $        1,832,0001,276,000339,000142,000-3,589,000                            |   |  $        1,537,000259,000130,00068,00064,0002,058,000                                                                                                                                                                    |
| Long-term      deferred revenueLong-term      debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 1,905,0005,500,000                                                                                                           |   | 910,0005,500,000                                                                                                                                                                                                                                                       |
|  Total      liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 10,994,000                                                                                                                   |   | 8,468,000                                                                                                                                                                                                                                                              |
| Commitments      and contingencies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                         |   |                                                                                                                                                                                                                                                                   |
|  Stockholders'      equity (deficit)  Preferred      stock - $.01 par value; authorized 2,000,000 shares;3,499.8617 issued at June 30,      2008; 3,227.3617 issuedat December 31,      2007  Common      stock - $.01 par value; authorized 100,000,000 shares;     issued,      5,648,781 at June 30, 2008 and 3,585,458 at     December      31, 2007  Additional      paid-in capital  Notes      receivable from stockholders  Treasury      stock, at cost – 163 shares  Accumulated      deficit            Total      stockholders' equity (deficit) |    -  56,000126,431,000(1,045,000)(4,000)(129,512,000)(4,074,000)                                   |   |    -  36,000116,018,000(1,045,000)(4,000)(114,324,000)681,000                                                                                                                                                                                 |
|             Total      liabilities and stockholders' equity (deficit)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $        6,920,000                                                                   |   | $        9,149,000                                                                                                                                                                                                             |

----

|                                                                                                   |   | Three      months endedJune 30, |       |   | Six      months endedJune 30, |   |
|--------------------------------------------------------------------------------------------------------|--------|---------------------------------|------------|--------|-------------------------------|--------|
|                                                                                                   |   | 2008                            |       |   | 2007                          |   |   | 2008 |   |   | 2007 |   |
| Revenues                                                                                               |   |                            |       |   |                          |   |   |   |   |   |   |   |
| Licenserevenues                                                                                        |   | $                               | 22,000     |   |                          | $      | - |   |   | $ | 39,000 |   |   | $ | - |   |
| Sponsored research and      development                                                                |   |                            | 110,000    |   |                          |   | - |   |   |   | 131,000 |   |   |   | - |   |
| Total revenues                                                                                         |   |                            | 132,000    |   |                          |   | - |   |   |   | 170,000 |   |   |   | - |   |
|                                                                                                   |   |                            |       |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Expenses                                                                                               |   |                            |       |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Research and      development                                                                          |   |                            | 1,179,000  |   |                          |   | 523,000 |   |   |   | 10,824,000 |   |   |   | 936,000 |   |
| General and      administrative                                                                        |   |                            | 1,044,000  |   |                          |   | 1,113,000 |   |   |   | 1,933,000 |   |   |   | 2,252,000 |   |
| Depreciation and      amortization                                                                     |   |                            | 64,000     |   |                          |   | 74,000 |   |   |   | 131,000 |   |   |   | 149,000 |   |
| Total expenses                                                                                         |   |                            | 2,287,000  |   |                          |   | 1,710,000 |   |   |   | 12,888,000 |   |   |   | 3,337,000 |   |
|                                                                                                   |   |                            |       |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Loss      from operations                                                                              |   |                            | (2,155,000 | )      |                          |   | (1,710,000 | ) |   |   | (12,718,000 | ) |   |   | (3,337,000 | ) |
|                                                                                                   |   |                            |       |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Interest      and miscellaneous income                                                                 |   |                            | 29,000     |   |                          |   | 25,000 |   |   |   | 105,000 |   |   |   | 60,000 |   |
| Interest      and other expense                                                                        |   |                            | (117,000   | )      |                          |   | (424,000 | ) |   |   | (225,000 | ) |   |   | (2,959,000 | ) |
|                                                                                                   |   |                            | (88,000    | )      |                          |   | (399,000 | ) |   |   | (120,000 | ) |   |   | (2,899,000 | ) |
| Net      loss                                                                                          |   |                            | (2,243,000 | )      |                          |   | (2,109,000 | ) |   |   | (12,838,000 | ) |   |   | (6,236,000 | ) |
|                                                                                                   |   |                            |       |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Less      preferred stock dividends                                                                    |   |                            | 517,000    |   |                          |   | - |   |   |   | 2,350,000 |   |   |   | - |   |
| Net      loss allocable to common stockholders                                                         |   | $                               | (2,760,000 | )      |                          | $      | (2,109,000 | ) |   | $ | (15,188,000 | ) |   | $ | (6,236,000 | ) |
|                                                                                                   |   |                            |       |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Basic      and diluted loss per common share  Net      loss allocable to common shareholders |   | $                               | (0.49      | )      |                          | $      | (0.60 | ) |   | $ | (2.76 | ) |   | $ | (1.76 | ) |
|                                                                                                   |   |                            |       |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      average basic and dilutedcommon shares      outstanding                                  |   |                            | 5,635,869  |   |                          |   | 3,538,409 |   |   |   | 5,508,064 |   |   |   | 3,536,812 |   |
|                                                                                                   |   |                            |       |   |                          |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                   |   |                            |       |   |                          |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                                                                                                                                                                            |   | Six Months ended June      30, |           |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|----------------|
|                                                                                                                                                                                                            |   | 2008                           |           |   | 2007 |   |
| Cash      flows from operating activities:                                                                                                                                                                      |   |                           |           |   |   |   |
|      Net      loss                                                                                                                                                                     |   | $                              | (12,838,000    | ) |   | $ | (6,236,000 | ) |
|   Adjustments to      reconcile net loss to cash used              in      operating activities:                                |   |                           |           |   |   |   |   |   |
| Depreciation and      amortization                                                                                                                                                                              |   |                           | 132,000        |   |   |   | 149,000 |   |
| Stock option      expense                                                                                                                                                                                       |   |                           | 140,000        |   |   |   | 603,000 |   |
| Stock issued for      services                                                                                                                                                                                  |   |                           | 20,000         |   |   |   | - |   |
| Acquired in-process research      and development                                                                                                                                                               |   |                           | 8,879,000      |   |   |   | - |   |
| Amortization of debt costs and      discounts                                                                                                                                                                   |   |                           | -              |   |   |   | 2,316,000 |   |
| Changes in operating assets and      liabilities:                                                                                                                                                               |   |                           |           |   |   |   |   |   |
|     Receivables                                                                                                                                                                             |   |                           | (70,000        | ) |   |   | 151,000 |   |
|      Prepaid expenses and      other current assets                                                                                                                                    |   |                           | (140,000       | ) |   |   | (234,000 | ) |
|            Other assets                                                                                                                                                                |   |                           | -              |   |   |   | 1,000 |   |
|     Accounts      payable and accrued expenses                                                                                                                                              |   |                           | (711,000       | ) |   |   | 124,000 |   |
|               Dividends payable                                                                                                                                         |   |                           | (25,000        | )  |   |   | - |   |
|              Accrued      interest payable                                                                                                     |   |                           | 209,000        |   |   |   | 636,000 |   |
|                   Deferred revenues                                                                                                                 |   |                           | 1,069,000      |   |   |   | - |   |
| Net cash used in operating      activities                                                                                                                                                                      |   |                           | (3,335,000     | ) |   |   | (2,490,000 | ) |
|                                                                                                                                                                                                            |   |                           |           |   |   |   |   |   |
| Cash      flows from investing activities:                                                                                                                                                                      |   |                           |           |   |   |   |   |   |
|     Capital      expenditures                                                                                                                                                               |   |                           | (28,000        | ) |   |   | (18,000 | ) |
|  Somanta acquisition, net      of cash acquired                                                                                                                                                            |   |                           | (65,000        | ) |   |   | - |   |
|  Redemptions of short term      investments andcertificates of      deposit                                                                                                                                |   |                           | 970,000        |   |   |   | 1,465,000 |   |
| Net cash provided by investing      activities                                                                                                                                                                  |   |                           | 877,000        |   |   |   | 1,447,000 |   |
|                                                                                                                                                                                                            |   |                           |           |   |   |   |   |   |
| Cash      flows from financing activities:                                                                                                                                                                      |   |                           |           |   |   |   |   |   |
|     Payments      of notes payable                                                                                                                                                          |   |                           | (64,000        | ) |   |   | - |   |
|     Proceeds      from preferred stock issuances, net of costs                                                                                                                              |   |                           | 2,444,000      |   |   |   | - |   |
|     Proceeds      from exercise of common stock options                                                                                                                                     |   |                           | 15,000         |   |   |   | 19,000 |   |
| Net cash provided by financing      activities                                                                                                                                                                  |   |                           | 2,395,000      |   |   |   | 19,000 |   |
|                                                                                                                                                                                                            |   |                           |           |   |   |   |   |   |
| Net      decrease in cash and cash equivalents                                                                                                                                                                  |   |                           | (63,000        | ) |   |   | (1,024,000 | ) |
| Cash      and cash equivalents at beginning of period                                                                                                                                                           |   |                           | 159,000        |   |   |   | 1,194,000 |   |
| Cash      and cash equivalents at end of period                                                                                                                                                                 |   | $                              | 96,000         |   |   | $ | 170,000 |   |
|                                                                                                                                                                                                            |   |                           |           |   |   |   |   |   |
| Supplemental      cash flow information:                                                                                                                                                                        |   |                           |           |   |   |   |   |   |
|    Cash      paid for interest                                                                                                                                                                   |   | $                              | 8,000          |   |   | $ | 8,000 |   |
|                                                                                                                                                                                                            |   |                           |           |   |   |   |   |   |
| Supplemental      disclosure of noncash transactions::                                                                                                                                                          |   |                           |           |   |   |   |   |   |
| Shares issued for      payables                                                                                                                                                                                 |   |                           | 1,576,000      |   |   |   | - |   |
|   Preferred      stock dividends in accounts payable                                                                                                                                                  |   |                           | 1,042,000      |   |   |   | - |   |
|   Beneficial      conversion feature –     February      2008 preferred stock dividends    November      2007 preferred stock dividends correction |   |                           | 857,000451,000 |   |   |   | -- |   |
|   Preferred      stock issuance costs paid in cash                                                                                                                                                    |   |                           | 281,000        |   |   |   | - |   |

----

|                                            |   | June      30, 2008 |        |   | December      31, 2007  |   |
|-------------------------------------------------|--------|--------------------|-------------|--------|-------------------------|--------|
|                                            |   | Grosscarryingvalue |        |   | Accumulatedamortization |   |   | Grosscarryingvalue |   |   | AccumulatedAmortization |   |
| Amortizable      intangible assets Patents |   | $                  |  1,680 |   |                    | $      |  1,054 |   |   | $ |  1,680 |   |   | $ |  970 |   |
|                                            |   |               |        |   |                    |   |   |   |   |   |   |   |   |   |   |   |

|  2008          |   | $      | 84     |   |
|-------------------------------|--------|--------|--------|--------|
|  2009                    |   |   | 168    |   |
|  2010               |   |   | 168    |   |
|  2011               |   |   | 168    |   |
|  2012          |   |   | 38     |   |
|                          |   |   |   |   |
|  Total    |   | $      | 626    |   |

----

| ·   | Approximately      1.5 million shares of Access common stock were issued to the common and      preferred shareholders of Somanta as consideration having a value of      approximately $4,650,000 (the value was calculated using Access’ stock      price on January 4, 2008 times the number of shares    issued); |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | exchange      all outstanding warrants for Somanta common stock for warrants to purchase      191,991 shares of Access common stock at exercise prices ranging between      $18.55 and $69.57 per share. The warrants were valued at approximately      $281,000. All of the warrants are exercisable immediately and expire      approximately four years from date of issue. The weighted average fair      value of the warrants was $1.46 per share on the date of the grant using      the Black-Scholes pricing model with the following assumptions: expected      dividend yield 0.0%, risk-free interest rate 3.26%, expected volatility      114% and an expected term of approximately 4  years; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | paid      an aggregate of $475,000 in direct transaction costs;  and |
|--------------------|----------------------------------------------------------------------|

| ·   | cancelled      receivable from Somanta of$931,000. |
|--------------------|----------------------------------------------------|

|  Cash                                                               |   | $      | 1      |   |
|--------------------------------------------------------------------------|--------|--------|--------|--------|
|  Prepaid      expenses                                    |   |   | 25     |   |
|  Office      equipment, net                                    |   |   | 14     |   |
|  Accounts      payable                     |   |   | (2,582 | )      |
|  In-process      research & development     |   |   | 8,879  |   |
|                                                                     |   | $      | 6,337  |   |

|                                                                    |   | Three monthsendedJune 30, |   |   | Six months endedJune 30, |   |
|-------------------------------------------------------------------------|--------|---------------------------|--------|--------|--------------------------|--------|
|                                                                    |   | 2008                      |   |   | 2007                     |   |   | 2008 |   |   | 2007 |   |
| Net      loss                                                           |   | $                         | (2,760 | )      |                     | $      | (7,188 | ) |   | $ | (15,188 | ) |   | $ | (13,157 | ) |
|                                                                    |   |                      |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Net      loss per common shares (basic and diluted)                     |   | $                         | (0.49  | )      |                     | $      | (1.43 | ) |   | $ | (2.76 | ) |   | $ | (2.61 | ) |
|                                                                    |   |                      |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      average common shares outstanding(basic      and diluted) |   |                      | 5,636  |   |                     |   | 5,038 |   |   |   | 5,508 |   |   |   | 5,037 |   |

----

----

|                                                                    |   | Three      months endedJune 30, |   |   | Six      months endedJune 30, |   |
|-------------------------------------------------------------------------|--------|---------------------------------|--------|--------|-------------------------------|--------|
|                                                                    |   | 2008                            |   |   | 2007                          |   |   | 2008 |   |   | 2007 |   |
| Research      and development                                           |   | $                               | 26,000 |   |                          | $      | 17,000 |   |   | $ | 39,000 |   |   | $ | 33,000 |   |
| General      and administrative                                         |   |                            | 57,000 |   |                          |   | 294,000 |   |   |   | 101,000 |   |   |   | 570,000 |   |
| Stock-based      compensation expenseincluded      in operating expense |   |                            | 83,000 |   |                          |   | 311,000 |   |   |   | 140,000 |   |   |   | 603,000 |   |

|                         |                     |    |         |   |
|------------------------------|--------------------------|---------|--------------|--------|
|                         | 6/30/08                  |    | 6/30/07      |   |
| Expected      life           |   6.2      yrs |    | 4.3 yrs |   |
| Risk      free interest rate |   3.0          | %       | 4.7          | %      |
| Expected      volatility(a)  |   133          | %  | 137          | %      |
| Expected      dividend yield |   0.0          | %       | 0.0          | %      |
|                         |                     |    |         |   |

| (a) | Reflects      movements in our stock price over the most recent historical period      equivalent to the expected life. |
|-----|-------------------------------------------------------------------------------------------------------------------------|

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