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

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

|  Delaware  (State or other jurisdiction of  incorporation or organization)   |   |  59-2758596(I.R.S. EmployerIdentification No.) |
|-----------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|
|   354 Eisenhower ParkwayLivingston, New Jersey (Address of principal executive offices)               |   |   07039(Zip Code)                         |

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----

----

|                                                               |    | September 30,                                                                                                                                                                               |   |    | December 31,                                                                                                                                                                                |
|--------------------------------------------------------------------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                               |    | 2010 (Restated)*                                                                                                                                                                            |   |    | 2009 (Restated)                                                                                                                                                                             |
|                                                               |    | (Unaudited)                                                                                                                                                                                 |   |    |                                                                                                                                                                                        |
| ASSETS                                                             |    |                                                                                                                                                                                        |   |    |                                                                                                                                                                                        |
| Current Assets:                                                    |    |                                                                                                                                                                                        |   |    |                                                                                                                                                                                        |
| Cash and cash equivalents of which $8,240,760 in 2010 and          |    |                                                                                                                                                                                        |   |    |                                                                                                                                                                                        |
|  $12,225,732 in 2009 is interest bearing                      |  $ |                22,434,558                                                                                        |   |  $ |                14,757,615                                                                                        |
| Accounts receivable, net of allowances for doubtful accounts       |    |                                                                                                                                                                                        |   |    |                                                                                                                                                                                        |
|  of $100,000 in 2010 and 2009, respectively (including        |    |                                                                                                                                                                                        |   |    |                                                                                                                                                                                        |
| amounts from related parties: 2010 - $576,749; 2009 - $0)          |    |                  2,447,988                                                                             |   |    |                  4,262,851                                                                             |
| Inventories                                                        |    |                  2,766,766                                                                             |   |    |                  2,532,722                                                                             |
| Prepaid expenses and other current assets                          |    |                     218,169                                                             |   |    |                  1,097,525                                                                             |
| Total current assets                                               |    |                27,867,481                                                                                        |   |    |                22,650,713                                                                                        |
|                                                               |    |                                                                                                                                                                                        |   |    |                                                                                                                                                                                        |
| Property and equipment, net                                        |    |                     564,925                                                             |   |    |                     691,479                                                             |
| Intangible assets, net                                             |    |                                - |   |    |                18,770,332                                                                                        |
| Other assets                                                       |    |                     483,883                                                             |   |    |                  1,644,695                                                                             |
|                                                               |    |                                                                                                                                                                                        |   |    |                                                                                                                                                                                        |
| TOTAL ASSETS                                                       |  $ |                28,916,289                                                                                        |   |  $ |                43,757,219                                                                                        |
|                                                               |    |                                                                                                                                                                                        |   |    |                                                                                                                                                                                        |
| LIABILITIES AND SHAREHOLDERS' DEFICIT                              |    |                                                                                                                                                                                        |   |    |                                                                                                                                                                                        |
| Current Liabilities:                                               |    |                                                                                                                                                                                        |   |    |                                                                                                                                                                                        |
| Current portion of financing agreements                            |  $ |                              -             |   |  $ |                     144,897                                                             |
| Accounts payable                                                   |    |                  1,944,315                                                                             |   |    |                  3,662,091                                                                             |
| Accrued expenses                                                   |    |                  6,963,451                                                                             |   |    |                  4,588,088                                                                             |
| Redeemable warrants                                                |    |                  5,643,021                                                                             |   |    |                              -             |
| Common stock warrant liablility                                    |    |                  4,057,817                                                                             |   |    |                  4,057,817                                                                             |
| Total current liabilities                                          |    |                18,608,604                                                                                        |   |    |                12,452,893                                                                                        |
|                                                               |    |                                                                                                                                                                                        |   |    |                                                                                                                                                                                        |
| Notes payable                                                      |    |                                - |   |    |                32,965,863                                                                                        |
| Long-term portion of financing agreements                          |    |                                - |   |    |                15,234,406                                                                                        |
| Deferred revenue, (including amounts from related parites:         |    |                                                                                                                                                                                        |   |    |                                                                                                                                                                                        |
| 2010 - $25,554,840; 2009 - $0)                                     |    |                25,835,106                                                                                        |   |    |                     328,367                                                             |
|                                                               |    |                44,443,710                                                                                        |   |    |                60,981,529                                                                                        |
| TOTAL LIABILITIES                                                  |    |                                                                                                                                                                                        |   |    |                                                                                                                                                                                        |
|                                                               |    |                                                                                                                                                                                        |   |    |                                                                                                                                                                                        |
| COMMITMENTS AND CONTINGENCIES                                      |    |                                                                                                                                                                                        |   |    |                                                                                                                                                                                        |
|                                                               |    |                                                                                                                                                                                        |   |    |                                                                                                                                                                                        |
| Contingently Redeemable Series C Preferred Stock,                  |    |                                                                                                                                                                                        |   |    |                                                                                                                                                                                        |
| 600 shares issued and outstanding in 2010 and 2009,                |    |                                                                                                                                                                                        |   |    |                                                                                                                                                                                        |
| respectively (liquidation preference of $600,000)                  |    |                     600,000                                                             |   |    |                     600,000                                                             |
|                                                               |    |                                                                                                                                                                                        |   |    |                                                                                                                                                                                        |
| SHAREHOLDERS' DEFICIT:                                             |    |                                                                                                                                                                                        |   |    |                                                                                                                                                                                        |
| Preferred stock, $.01 par value;1,000,000 shares authorized        |    |                                                                                                                                                                                        |   |    |                                                                                                                                                                                        |
| Series B Convertible Preferred Stock, 130 shares issued and        |    |                                                                                                                                                                                        |   |    |                                                                                                                                                                                        |
| outstanding (liquidation preference of $13,000)                    |    |                                1 |   |    |                                1 |
| Series E Convertible Preferred Stock, 59,000 shares issued and     |    |                                                                                                                                                                                        |   |    |                                                                                                                                                                                        |
| outstanding (liquidation preference of $5,900,000)                 |    |                            590                       |   |    |                            590                       |
| Common Stock $.01 par value; 150,000,000 shares and 100,000,000    |    |                                                                                                                                                                                        |   |    |
| authorized in 2010 and 2009, respectively; 84,434,611 and          |    |                                                                                                                                                                                        |   |    |                                                                                                                                                                                        |
| 65,761,986  shares issued in 2010 and 2009, respectively |    |                     844,345                                                             |   |    |                     657,619                                                             |
| Capital in excess of par value                                     |    |              260,439,004                                                                                                   |   |    |              238,579,829                                                                                                   |
| Less cost of 3,521,499 and 131,935 treasury shares in              |    |                                                                                                                                                                                        |   |    |                                                                                                                                                                                        |
| 2010 and 2009, respectively                                        |    |                (3,403,090)                                                                                       |   |    |                   (280,813)                                                                       |
| Accumulated deficit                                                |    |            (274,194,519)                                                                                                             |   |    |            (256,979,263)                                                                                                             |
| Accumulated other comprehensive income                             |    |                     186,248                                                             |   |    |                     197,727                                                             |
| Shareholders' deficit                                              |    |              (16,127,421)                                                                                                  |   |    |              (17,824,310)                                                                                                  |
| TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT                        |  $ |                28,916,289                                                                                        |   |  $ |                43,757,219                                                                                        |
|                                                               |    |                                                                                                                                                                                        |   |    |                                                                                                                                                                                        |

----

|                                                              |   | Nine Months Ended                                                                                             |    |                                                                                                          | Three Months Ended |   |
|-------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------|---------|---------------------------------------------------------------------------------------------------------------|--------------------|--------|
|                                                              |   | September 30,                                                                                                 |    |                                                                                                          | September 30,      |   |
|                                                              |   | 2010                                                                                                          |    | 2009                                                                                                          |               |   | 2010 |   | 2009 |   |
| REVENUES                                                          |   |                                                                                                          |    |                                                                                                          |               |   |   |   |   |   |
| Net product revenues (including amounts from related parties:     |   |                                                                                                          |    |                                                                                                          |               |   |   |   |
| 2010 - $581,104; 2009 - $0)                                       | $      |     21,702,045                                                                            |  $ |     23,318,938                                                                            |               | $      |       5,117,378 |  $ |       7,807,945 |   |
| Royalties (including amounts from related parties:                |   |                                                                                                          |    |                                                                                                          |               |   |   |   |   |   |
| 2010 - $450,000; 2009 - $0)                                       |   |         544,349                                                       |    |         256,683                                                       |               |   |         540,380 |   |           75,713 |   |
| Other revenues (including amounts from related parties:           |   |                                                                                                          |    |                                                                                                          |               |   |   |   |
| 2010 - $8,487,192; 2009 - $0)                                     |   |       8,537,003                                                                 |    |           72,227                                            |               |   |       8,503,655 |   |           19,299 |   |
| Total net revenues                                                |   |     30,783,397                                                                            |    |     23,647,848                                                                            |               |   |     14,161,413 |   |       7,902,957 |   |
|                                                              |   |                                                                                                          |    |                                                                                                          |               |   |   |   |   |   |
| COST OF PRODUCT REVENUES                                          |   |                                                                                                          |    |                                                                                                          |               |   |   |   |   |   |
| Cost of product revenues (including amounts from related parties: |   |                                                                                                          |    |                                                                                                          |               |   |   |   |
| 2010 - $528,473; 2009 - $0)                                       |   |       6,232,062                                                                 |    |       6,680,929                                                                 |               |   |       2,969,827 |   |       2,561,560 |   |
| Gross profit                                                      |   |     24,551,335                                                                            |    |     16,966,919                                                                            |               |   |     11,191,586 |   |       5,341,397 |   |
|                                                              |   |                                                                                                          |    |                                                                                                          |               |   |   |   |   |   |
| OPERATING EXPENSES:                                               |   |                                                                                                          |    |                                                                                                          |               |   |   |   |   |   |
| Selling and distribution                                          |   |       9,882,039                                                                 |    |       8,999,177                                                                 |               |   |       3,925,408 |   |       3,096,810 |   |
| General and administrative                                        |   |     12,451,067                                                                            |    |       7,708,514                                                                 |               |   |       4,339,349 |   |       2,147,515 |   |
| Research and development                                          |   |       6,609,318                                                                 |    |       6,206,028                                                                 |               |   |       2,034,183 |   |       2,258,656 |   |
| Amortization of licensing right                                   |   |       2,522,364                                                                 |    |       3,783,546                                                                 |               |   |                   - |   |       1,261,182 |   |
| Total operating expenses                                          |   |     31,464,788                                                                            |    |     26,697,265                                                                            |               |   |     10,298,940 |   |       8,764,163 |   |
|                                                              |   |                                                                                                          |    |                                                                                                          |               |   |   |   |   |   |
| (Loss) income from operations                                     |   |     (6,913,453)                                                                           |    |     (9,730,346)                                                                           |               |   |         892,646 |   |     (3,422,766) |   |
|                                                              |   |                                                                                                          |    |                                                                                                          |               |   |   |   |   |   |
| OTHER INCOME (EXPENSE):                                           |   |                                                                                                          |    |                                                                                                          |               |   |   |   |   |   |
| Interest income                                                   |   |           24,625                                            |    |           33,801                                            |               |   |           22,416 |   |             5,057 |   |
| Interest expense                                                  |   |     (4,832,641)                                                                           |    |     (6,488,859)                                                                           |               |   |          (12,549) |   |     (2,283,524) |   |
| Change in fair value of derivative                                |   |                   - |    |                   - |               |   |       4,829,036 |   |                   - |   |
| Loss on debt extinguishment                                       |   |     (5,156,775)                                                                           |    |                   - |               |   |     (5,156,775) |   |                   - |   |
| Change in fair value of redeemable warrants                       |   |        (133,128)                                                           |    |                   - |               |   |        (133,128) |   |                   - |   |
| Other, net                                                        |   |        (201,684)                                                           |    |        (225,156)                                                           |               |   |        (184,024) |   |        (152,029) |   |
| Total other expenses                                              |   |    (10,299,603)                                                                                |    |     (6,680,214)                                                                           |               |   |        (635,024) |   |     (2,430,496) |   |
|                                                              |   |                                                                                                          |    |                                                                                                          |               |   |   |   |   |   |
| (Loss) Income before taxes                                        |   |    (17,213,056)                                                                                |    |    (16,410,560)                                                                                |               |   |         257,622 |   |     (5,853,262) |   |
| State income taxes                                                |   |           (2,200)                                           |    |          (16,930)                                                |               |   |                   - |   |                   - |   |
| NET (LOSS) INCOME                                                 | $      |    (17,215,256)                                                                                |  $ |    (16,427,490)                                                                                |               | $      |         257,622 | $ |     (5,853,262) |   |
|                                                              |   |                                                                                                          |    |                                                                                                          |               |   |   |   |   |   |
| NET (LOSS) INCOME PER COMMON SHARE:                               |   |                                                                                                          |    |                                                                                                          |               |   |   |   |   |   |
| Basic                                                             | $      |             (0.24)                                | $       |             (0.30)                                |               | $      |              0.00 | $ |             (0.11) |   |
| Diluted                                                           | $      |             (0.24)                                | $       |             (0.30)                                |               | $      |              0.00 | $ |             (0.11) |   |
|                                                              |   |                                                                                                          |    |                                                                                                          |               |   |   |   |   |   |
| WEIGHTED AVERAGE NUMBER OF                                        |   |                                                                                                          |    |                                                                                                          |               |   |   |   |   |   |
| COMMON SHARES OUTSTANDING:                                        |   |                                                                                                          |    |                                                                                                          |               |   |   |   |   |   |
| Basic                                                             |   | 70,987,668                                                                                                    |    | 54,397,545                                                                                                    |               |   | 82,010,063 |   | 54,455,731 |   |
| Diluted                                                           |   | 70,987,668                                                                                                    |    | 54,397,545                                                                                                    |               |   | 82,010,063 |   | 54,455,731 |   |
|                                                              |   |                                                                                                          |    |                                                                                                          |               |   |   |   |   |   |
|                                                              |   |                                                                                                          |    |                                                                                                          |               |   |   |   |   |   |

----

|                               |                         |     | Nine Months Ended    |   | Three Months Ended                     |
|------------------------------------|------------------------------|----------|----------------------|--------|----------------------------------------|
|                               |                         |     | September 30,        |   | September 30,                          |
|                               |                         |     | 2010                 |   | 2009                                   |   | 2010 |   | 2009 |
|                               |                         |     |                 |   |                                   |   |   |   |   |
| NET (LOSS) INCOME                  |  $ (17,215,256)         |     |  $ (16,427,490) |   |  $    257,622 |   |  $(5,853,262) |
|                               |                         |     |                 |   |                                   |   |   |   |   |
| Other comprehensive (loss) income: |                         |     |                 |   |                                   |   |   |
|                               | Foreign currency translation | (11,479) |                 | 26,268 |                                   | 12,032 |   | 7,427 |
|                               |                         |     |                 |   |                                   |   |   |   |   |
| COMPREHENSIVE (LOSS) INCOME        |  $ (17,226,735)         |     |  $ (16,401,222) |   |  $    269,654 |   |  $(5,845,835) |
|                               |                         |     |                 |   |                                   |   |   |   |   |

----

|                                                                        |                                                            | Series B ConvertiblePreferred Stock                             | Series E ConvertiblePreferred Stock                | Common Stock                                       |                                 | Capital inExcess ofPar Value (restated)* | TreasuryStock                            | AccumulatedDeficit                                                       | Accumulated OtherComprehensiveIncome (Loss) | Total                                                                                   |
|-----------------------------------------------------------------------------|-----------------------------------------------------------------|-----------------------------------------------------------------|----------------------------------------------------|----------------------------------------------------|--------------------------------------|------------------------------------------|------------------------------------------|--------------------------------------------------------------------------|---------------------------------------------|-----------------------------------------------------------------------------------------|
|                                                                        |                                                            | Number ofShares                                                 | Amount                                             | Number ofShares                                    | Amount                               | Number ofShares                          | Amount                                   |                                                                     |                                        |                                                                                    |   |   |   |   |   |   |   |
| Balance, December 31, 2009                                                  |                                                            |           130 |                                               |  $       1 |                                 |      59,000     |                                     |  $     590                                 |                                        |     65,761,986                                                      |   |  $    657,619 |   |  $   238,579,829 |   |  $      (280,813) |   |  $   (256,979,263) |   |  $              197,727 |   |  $     (17,824,310) |
| Issuance of common stock and warrants                                       |                                                            |                                                            |                                               |                                               |                                 |                                     |                                     |     18,607,407                                       |                                        |        186,074                                       |   |         19,196,706 |   |   |   |   |   |   |   |           19,382,780 |
| Share based compensation expense                                            |                                                            |                                                            |                                               |                                               |                                 |                                     |                                     |            65,218 |                                        |               652 |   |           2,684,969 |   |   |   |   |   |   |   |             2,685,621 |
| Repurchase of company stock                                                 |                                                            |                                                            |                                               |                                               |                                 |                                     |                                     |                                                                     |                                        |                                                                                    |   |   |   |   |       (3,059,996) |   |   |   |   |   |           (3,059,996) |
| Purchase of treasury stock                                                  |                                                            |                                                            |                                               |                                               |                                 |                                     |                                     |                                                                     |                                        |                                                                                    |   |   |   |   |   |            (62,281) |   |   |   |   |   |                (62,281) |
| Dividends on preferred stock                                                |                                                            |                                                            |                                               |                                               |                                 |                                     |                                     |                                                                     |                                        |                                                                                    |   |   |               (22,500) |   |   |   |   |   |   |   |                (22,500) |
| Translation adjustment                                                      |                                                            |                                                            |                                               |                                               |                                 |                                     |                                     |                                                                     |                                        |                                                                                    |   |   |   |   |   |   |   |   |   |                  (11,479) |   |                (11,479) |
| Net loss                                                                    |                                                            |                                                            |                                               |                                               |                                 |                                     |                                     |                                                                     |                                        |                                                                                    |   |   |   |   |   |   |   |         (17,215,256) |   |   |   |         (17,215,256) |
| Balance, September 30, 2010,      as restated |           130 |                                                            |  $       1 |                                               |      59,000 |                                     |  $     590 |                                                                     |     84,434,611          |                                                                                    |  $    844,345 |   |  $   260,439,004 |   |  $   (3,403,090) |   |  $   (274,194,519) |   |  $              186,248 |   |  $     (16,127,421) |
|                                                                        |                                                            |                                                            |                                               |                                               |                                 |                                     |                                     |                                                                     |                                        |                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                  |                                             |                                                       |                                                                             |                                                                                                                      |                                                                                                                      |                                                                                                                      |                                                                                                                      | Nine Months Ended September 30,                                                                                           |
|---------------------------------------|--------------------------------------------------|------------------------------------------------------------|----------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------|
|                                  |                                             |                                                       |                                                                             |                                                                                                                      |                                                                                                                      |                                                                                                                      |                                                                                                                      | 2010                                                                                                                      |   | 2009 |
| CASH FLOWS FROM OPERATING ACTIVITIES: |                                             |                                                       |                                                                             |
|                                  | Net loss                                         |                                                       |                                                                             |                                                                                                                      |                                                                                                                      |  $   (17,215,256)                                                                                     |                                                                                                                      |  $   (16,427,490)                                                                                     |
|                                  | Adjustments to reconcile net loss to net         |                                                       |                                                                             |                                                                                                                      |                                                                                                                      |
|                                  |                                             | cash used in operating activities-                         |                                                                             |                                                                                                                      |                                                                                                                      |                                                                                                                      |                                                                                                                      |
|                                  |                                             |                                                       | Depreciation and amortization                                                    |                                                                                                                      |                                                                                                                      |          3,107,178                                                           |                                                                                                                      |          4,211,858                                                           |
|                                  |                                             |                                                       | Amortization on beneficial conversion features                                   |             918,710                                           |                                                                                                                      |          1,222,692                                                           |
|                                  |                                             |                                                       | Amortization on warrant valuation                                                |                                                                                                                      |             673,852                                           |                                                                                                                      |             909,898                                           |
|                                  |                                             |                                                       | Change in value of warrants                                                      |                                                                                                                      |                                                                                                                      |             133,128                                           |                                                                                                                      |                     - |
|                                  |                                             |                                                       | Recognition of deferred income                                                   |                                                                                                                      |                                                                                                                      |         (8,537,003)                                                               |                                                                                                                      |             (38,135)                                          |
|                                  |                                             |                                                       | Provision for sales returns                                                      |                                                                                                                      |                                                                                                                      |          1,633,424                                                           |                                                                                                                      |             848,662                                           |
|                                  |                                             |                                                       | Writeoff of accounts receivable                                                  |                                                                                                                      |                                                                                                                      |               67,744                                |                                                                                                                      |                     - |
|                                  |                                             |                                                       | Writedown of inventories                                                         |                                                                                                                      |                                                                                                                      |               42,595                                |                                                                                                                      |                1,496                           |
|                                  |                                             |                                                       | Loss on extingquishment of debt                                                  |                                                                                                                      |          5,156,775                                                           |                                                                                                                      |                     - |
|                                  |                                             |                                                       | Stock based compensation                                                         |                                                                                                                      |                                                                                                                      |          2,685,621                                                           |                                                                                                                      |          1,428,217                                                           |
|                                  |                                             |                                                       | Non-cash interest expense on financing agreements                                |          1,137,222                                                           |                                                                                                                      |          1,519,374                                                           |
|                                  | Changes in assets and liabilities-               |                                                       |                                                                             |                                                                                                                      |                                                                                                                      |                                                                                                                      |
|                                  |                                             | (Increase) decrease in:                                    |                                                                             |                                                                                                                      |                                                                                                                      |                                                                                                                      |                                                                                                                      |
|                                  |                                             |                                                       | Accounts receivable                                                              |                                                                                                                      |                                                                                                                      |                                                                                                                      |          1,747,119                                                           |                                                                                                                      |             333,426 |
|                                  |                                             |                                                       | Inventories                                                                      |                                                                                                                      |                                                                                                                      |                                                                                                                      |           (276,639)                                                     |                                                                                                                      |               63,432 |
|                                  |                                             |                                                       | Prepaid expenses and other current assets                                        |                                                                                                                      |             879,356                                           |                                                                                                                      |             716,050                                           |
|                                  |                                             |                                                       | Other assets                                                                     |                                                                                                                      |                                                                                                                      |                                                                                                                      |                 (737)                     |                                                                                                                      |                9,438 |
|                                  |  Increase (decrease) in:                    |                                                       |                                                                             |                                                                                                                      |                                                                                                                      |                                                                                                                      |
|                                  |                                             |                                                       | Accounts payable                                                                 |                                                                                                                      |                                                                                                                      |                                                                                                                      |         (1,717,776)                                                               |                                                                                                                      |             397,226 |
|                                  |                                             |                                                       | Other accrued expenses                                                           |                                                                                                                      |                                                                                                                      |             704,747                                           |                                                                                                                      |           (987,109)                                                     |
|                                  | Net cash used in operating activities            |                                                       |         (8,859,940)                      |                                                                                                                      |         (5,790,965)                                                               |
|                                  |                                             |                                                       |                                                                             |                                                                                                                      |                                                                                                                      |                                                                                                                      |                                                                                                                      |                                                                                                                      |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES: |                                             |                                                       |                                                                             |
|                                  | Purchase of property and equipment               |                                                       |             (34,864) |                                                                                                                      |             (48,039)                                          |
|                                  | Proceeds from sale of assets                     |                                                       |                                                                             |         35,240,000                                                                |                                                                                                                      |                     - |
|                                  |                                             |                                                       | Net cash provided by (used in) investing activities                              |         35,205,136                                                                |                                                                                                                      |             (48,039)                                          |
|                                  |                                             |                                                       |                                                                             |                                                                                                                      |                                                                                                                      |                                                                                                                      |                                                                                                                      |                                                                                                                      |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES: |                                             |                                                       |                                                                             |
|                                  | Net proceeds from the sale of common stock       |                                                       |         11,643,897                       |                                                                                                                      |             750,000                                           |
|                                  | Proceeds from financing agreements - Watson Note |         15,000,000 |                                                                             |                     - |
|                                  | Payment of note payable                          |                                                       |                                                                             |       (25,999,999)                                                                          |                                                                                                                      |                     - |
|                                  | Payments pursuant to financing agreements        |                                                       |       (16,155,903)                                 |                                                                                                                      |                     - |
|                                  | Repurchase of company stock                      |                                                       |                                                                             |         (3,059,996)                                                               |                                                                                                                      |                     - |
|                                  | Payments for purchase of treasury stock          |                                                       |             (62,281) |                                                                                                                      |             (91,584)                                          |
|                                  | Dividends paid                                   |                                                       |                                                                             |                                                                                                                      |             (22,500)                                          |                                                                                                                      |             (24,688)                                          |
|                                  |                                             |                                                       | Net cash provided by (used in) financing activities                              |       (18,656,782)                                                                          |                                                                                                                      |             633,728                                           |
|                                  |                                             |                                                       |                                                                             |                                                                                                                      |                                                                                                                      |                                                                                                                      |                                                                                                                      |                                                                                                                      |   |   |
|                                  |                                             |                                                       |                                                                             |                                                                                                                      |                                                                                                                      |                                                                                                                      |                                                                                                                      |                                                                                                                      |   |   |
|                                  |                                             |                                                       |                                                                             |                                                                                                                      |                                                                                                                      |                                                                                                                      |                                                                                                                      |                                                                                                                      |   |   |

----

|                                                     |                                                                                                     |                                                                      |   Nine Months Ended September 30,                                                                   |
|----------------------------------------------------------|----------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------|
|                                                     |                                                                                                     |                                                                      | 2010                                                                                                     |   | 2009 |
|                                                     |                                                                                                     |                                                                      |                                                                                                     |   |   |
| EFFECT OF EXCHANGE RATE CHANGES ON CASH                  |            (11,471)                               |                                                                      |             39,471                           |
|                                                     |                                                                                                     |                                                                      |                                                                                                     |   |   |
| NET INCREASE (DECREASE) IN CASH                          |         7,676,943                                                |                                                                      |        (5,165,805)                                                    |
|                                                     |                                                                                                     |                                                                      |                                                                                                     |   |   |
| CASH, BEGINNING OF PERIOD                                | 14,757,615                                                                                               |                                                                      | 12,497,382                                                                                               |
|                                                     |                                                                                                     |                                                                      |                                                                                                     |   |   |
| CASH END OF PERIOD                                       |  $    22,434,558                                                                |                                                                      |  $     7,331,577                                                           |
|                                                     |                                                                                                     |                                                                      |                                                                                                     |   |   |
| NON-CASH FINANCING ACTIVITIES                            |                                                                                                     |                                                                      |                                                                                                     |
|                                                     |                                                                                                     |                                                                      |                                                                                                     |   |   |
| Conversion of Series C and Series E preferred shares     |  $                - |                                                                      |  $        175,000                                           |
|                                                     |                                                                                                     |                                                                      |                                                                                                     |   |   |
| Issuance of Warrants for Option to Extend Pharmabio Debt |  $                - |                                                                      |  $        719,904                                           |
|                                                     |                                                                                                     |                                                                      |                                                                                                     |   |   |
| Forgiveness of Watson Note                               |  $    15,000,000                                                                |                                                                      |  $                - |
|                                                     |                                                                                                     |                                                                      |                                                                                                     |   |   |
| Net Issuance of Common Stock for Debt Retirement         |  $     7,738,883                                                           |                                                                      |  $                - |
|                                                     |                                                                                                     |                                                                      |                                                                                                     |   |   |
| Issuance of Warrants for Debt Retirement                 |  $     5,509,893                                                           |                                                                      |  $                - |
|                                                     |                                                                                                     |                                                                      |                                                                                                     |   |   |
| SUPPLEMENTAL INFORMATION                                 |                                                                                                     |                                                                      |                                                                                                     |
|                                                     |                                                                                                     |                                                                      |                                                                                                     |   |   |
| Interest paid                                            |                                                                                                     |  $     1,600,000                            |                                                                                                     |  $     2,400,003 |
|                                                     |                                                                                                     |                                                                      |                                                                                                     |   |   |
| Taxes paid                                               |                                                                                                     |  $          58,256 |                                                                                                     |  $          31,634 |
|                                                     |                                                                                                     |                                                                      |                                                                                                     |   |   |

----

| (1)              | SIGNIFICANT ACCOUNTING POLICIES: |
|-----------------------------------------------------------------------------------|----------------------------------|

| (2)              | RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS |
|-----------------------------------------------------------------------------------|--------------------------------------------------|

| Issuance Date |   | Number ofWarrants Issued |      |   | Exercise Price |   | Expiration ofWarrants |   | Fair Value ofWarrants atIssuance Date |   |
|--------------------|--------|--------------------------|-----------|--------|---------------------|--------|-----------------------|--------|---------------------------------------|--------|
|               |   |                     |      |   |                |   |                  |   | (In thousands)                        |   |
| October 23, 2009   |   |                     | 5,450,000 |   |                | $      | 1.52                  |   | April 30, 2015                        |   | $ | 4,057 |   |

----

| Consolidated Balance Sheet        |   | September 30, 2010       |                                                                                                                                        | September 30, 2010 |   |
|-----------------------------------|--------|--------------------------|---------------------------------------------------------------------------------------------------------------------------------------------|--------------------|--------|
| (in thousands)                    |   | (As previously reported) | (As restated)                                                                                                                               |               |
|                              |   |                     |                                                                                                                                        |               |   |   |   |
| Current Liabilities:              |   |                     |                                                                                                                                        |               |   |   |   |
| Common stock warrant liability    |   | $                        |                        - |               | $      |                   4,058 |   |
| Total Current Liabilities         |   |                     |                 14,551                                      |               |   |                 18,609 |   |
|                              |   |                     |                                                                                                                                        |               |   |   |   |
| Total Liabilities                 |   |                     |                 40,386                                      |               |   |                 44,444 |   |
|                              |   |                     |                                                                                                                                        |               |   |   |   |
| Stockholders’ Deficit:      |   |                     |                                                                                                                                        |               |   |   |   |
| Additional paid-in-capital        |   |                     |               264,497                                                 |               |   |               260,439 |   |
| Total Stockholders’ Deficit |   |                     |               (20,185)                                                |               |   |               (16,127) |   |

| (3)              | WATSON TRANSACTIONS: |
|-----------------------------------------------------------------------------------|----------------------|

----

| (4)              | DEFERRED REVENUE: |
|-----------------------------------------------------------------------------------|-------------------|

|                                                        | September 30,                                                                                                |   | December 31,                                                                                                                                            |
|-------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                        | 2010                                                                                                         |   | 2009                                                                                                                                                    |
| Cash Proceeds from Watson Transaction and Debt Forgiveness: |  $        62,000,000                                            |   |  $                      -            |
| Interest on Watson Note forgiven                            |                  50,000 |   |                                                                                                                                                    |
| Common Stock                                                |          (11,760,000)                                           |   |                          - |
| Gross Proceeds less Value of Stock                          |            50,290,000                                 |   |                                                                                                                                                    |
|                                                        |                                                                                                         |   |                                                                                                                                                    |
| Net Book Value of Intangible Assets Sold to Watson          |          (16,247,968)                                           |   |                          - |
| Deferred Revenue related to Watson                          |            34,042,032                                 |   |                                                                                                                                                    |
|                                                        |                                                                                                         |   |                                                                                                                                                    |
| Q310 Amortization of Deferred Revenue Related to Watson     |            (8,487,192)                                |   |                          - |
|                                                        |                                                                                                         |   |                                                                                                                                                    |
| Net Deferred Revenue - Watson                               |            25,554,840                                 |   |                          - |
|                                                        |                                                                                                         |   |                                                                                                                                                    |
| Deferred Revenue - Other                                    |                280,266            |   |                328,367                                                       |
|                                                        |                                                                                                         |   |                                                                                                                                                    |
| Deferred Revenue                                            |  $        25,835,106                                            |   |  $            328,367                                                                  |
|                                                        |                                                                                                         |   |                                                                                                                                                    |

| (5)              | SALES RETURN RESERVES: |
|-----------------------------------------------------------------------------------|------------------------|

----

|                            | Nine Months Ended September 30,                                      |
|---------------------------------|----------------------------------------------------------------------|
|                            | 2010                                                                 |   | 2009 |
|                            |                                                                 |   |   |
| Balance at beginning of year    |  $     1,883,623                       |   |  $   1,864,316 |
|                            |                                                                 |   |   |
| Provision:                      |                                                                 |   |   |
| Related to current period sales | 745,405                                                              |   | 485,778 |
| Related to prior period sales   |           888,019  |   |         362,884 |
|                            |        1,633,424                  |   | 848,662 |
|                            |                                                                 |   |   |
| Returns:                        |                                                                 |   |   |
| Related to current period sales |           (61,013) |   |          (17,896) |
| Related to prior period sales   |         (745,945)            |   |        (933,321) |
|                            |         (806,958)            |   |        (951,217) |
|                            |                                                                 |   |   |
| Balance at end of quarter       |  $     2,710,089                       |   |  $   1,761,761 |
|                            |                                                                 |   |   |

| (6)              | INVENTORIES: |
|-----------------------------------------------------------------------------------|--------------|

|           |   | September 30,                |   | December 31,                       |
|----------------|--------|------------------------------|--------|------------------------------------|
|           |   | 2010                         |   | 2009                               |
| Finished goods |   |  $  1,605,605 |   |  $   1,343,742 |
| Raw materials  |   | 1,161,161                    |   | 1,188,980                          |
|           |   |                         |   |                               |
|           |   |  $  2,766,766 |   |  $   2,532,722 |

| (7)              | NOTES PAYABLE: |
|-----------------------------------------------------------------------------------|----------------|

| (8)              | FINANCING AGREEMENTS-STRIANT: |
|-----------------------------------------------------------------------------------|-------------------------------|

----

| (9)              | DEBT EXTINGUISHMENT: |
|-----------------------------------------------------------------------------------|----------------------|

| Net Book Value of Long-Term Notes Payable                           |                                                            |                                                                                                                |  $          34,558,425                                   |
|---------------------------------------------------------------------|-----------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------|
| Consideration:                                                      | Number of shares                                                |                                                                                                                |
| Stock issued to Noteholders                                         |          7,407,407 |                                                                                                                |               (7,777,777)                 |
| Cash                                                                |                                                            |                                                                                                                |             (25,999,999)                            |
| Warrants to purchase shares of Common Stock                         |          7,750,000 |                                                                                                                |               (5,509,893)                 |
|                                                                |                                                            |                                                                                                                |                                                                                                            |
| Loss on Extinguishment of Notes                                     |                                                            |                                                                                                                |               (4,729,244)                 |
|                                                                |                                                            |                                                                                                                |                                                                                                            |
| Gain (Loss) on Debt Extinguishment of PharmaBio Debt Extinguishment |                                                            |                   310,622 |
| Write-off of Deferred Charges                                       |                                                            |                                                                                                                |                  (738,153) |
| Net Loss on Debt Extinguishment                                     |                                                            |                                                                                                                |  $           (5,156,775)                            |
|                                                                |                                                            |                                                                                                                |                                                                                                            |

| (10)              | FINANCING AGREEMENTS-WATSON NOTE: |
|------------------------------------------------------------------------------------|-----------------------------------|

----

| (11)              | GEOGRAPHIC INFORMATION: |
|------------------------------------------------------------------------------------|-------------------------|

|                          |                |                                                            | Net                                             |                                                                                                                      | Identifiable                                    |
|-------------------------------|---------------------|-----------------------------------------------------------------|-------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------|
|                          |                |                                                            | Revenues                                        |                                                                                                                      | Assets                                          |
|                          |                |                                                            |                                            |                                                                                                                      |                                            |
| As of and for the nine months |                |                                                            |                                            |
| ended September 30, 2010      |                |                                                            |                                            |
|                          | United States       |  $     21,422,766                 |                                            |  $     24,697,531                                                                           |
|                          |                |                                                            |                                            |                                                                                                                      |                                            |
|                          | Switzerland         |          7,694,077 |                                            |          4,218,758                                                           |
|                          | Other countries     |          1,666,554 |                                            |                     - |
|                          | Total International |          9,360,631 |                                            |          4,218,758                                                           |
|                          | Total               |                                                            |  $     30,783,397 |                                                                                                                      |  $     28,916,289 |
|                          |                |                                                            |                                            |                                                                                                                      |                                            |
| As of and for the nine months |                |                                                            |                                            |
| ended September 30, 2009      |                |                                                            |                                            |
|                          | United States       |  $     14,442,536                 |                                            |  $     31,775,481                                                                           |
|                          |                |                                                            |                                            |                                                                                                                      |                                            |
|                          | Switzerland         |          6,513,979 |                                            |          4,113,445                                                           |
|                          | Other countries     |          2,691,333 |                                            |                     - |
|                          | Total International |          9,205,312 |                                            |          4,113,445                                                           |
|                          | Total               |                                                            |  $     23,647,848 |                                                                                                                      |  $     35,888,926 |
|                          |                |                                                            |                                            |                                                                                                                      |                                            |

----

| (12)              | (LOSS) INCOME PER COMMON AND POTENTIAL COMMON SHARE: |
|------------------------------------------------------------------------------------|------------------------------------------------------|

|                                |                            |                 | Nine Months Ended                                                         |                 | Three Months Ended                                                        |
|-------------------------------------|---------------------------------|----------------------|---------------------------------------------------------------------------|----------------------|---------------------------------------------------------------------------|
|                                |                            |                 | September 30,                                                             |                 | September 30,                                                             |
|                                |                            |                 | 2010                                                                      |                 | 2009                                                                      |   | 2010 |   | 2009 |
| NET (LOSS) INCOME                   |  $ (17,215,256)            |                 |  $ (16,427,490)                                                      |                 |  $    257,622                                    |   |  $(5,853,262) |
|                                | Less: Preferred stock dividends | (22,500)             |                                                                      | (24,688)             |                                                                      | (7,500) |   | (7,500) |
|                                |                            |                 |                                                                      |                 |                                                                      |   |   |   |   |
| NET (LOSS) INCOME APPLICABLE TO     |                            |                 |                                                                      |                 |                                                                      |   |   |
|                                | COMMON STOCK                    |  $ (17,237,756) |                                                                      |  $ (16,452,178) |                                                                      |  $    250,122 |   |  $(5,860,762) |
|                                |                            |                 |                                                                      |                 |                                                                      |   |   |   |   |
|                                |                            |                 |                                                                      |                 |                                                                      |   |   |   |   |
| NET (LOSS) INCOME PER COMMON SHARE: |                            |                 |                                                                      |                 |                                                                      |   |
|                                |                            |                 |                                                                      |                 |                                                                      |   |   |   |   |
|                                | Basic                           |                 |  $          (0.24) |                 |  $          (0.30) |   |  $         0.00 |   |  $        (0.11) |
|                                | Diluted                         |                 |  $          (0.24) |                 |  $          (0.30) |   |  $         0.00 |   |  $        (0.11) |
|                                |                            |                 |                                                                      |                 |                                                                      |   |   |   |   |
| WEIGHTED AVERAGE NUMBER OF          |                            |                 |                                                                      |                 |                                                                      |   |   |
|                                | COMMON SHARES OUTSTANDING:      |                 |                                                                      |                 |                                                                      |   |   |   |
|                                | Basic                           |                 | 70,987,668                                                                |                 | 54,397,545                                                                |   | 82,010,063 |   | 54,455,731 |
|                                | Diluted                         |                 | 70,987,668                                                                |                 | 54,397,545                                                                |   | 82,010,063 |   | 54,455,731 |
|                                |                            |                 |                                                                      |                 |                                                                      |   |   |   |   |

| (13)              | LEGAL PROCEEDINGS |
|------------------------------------------------------------------------------------|-------------------|

| (14)              | STOCK-BASED COMPENSATION: |
|------------------------------------------------------------------------------------|---------------------------|

|                       |   | Nine Months Ended September 30,                                                 |
|----------------------------|--------|---------------------------------------------------------------------------------|
| Stock Based Compensation   |   | 2010                                                                            |   | 2009 |
|                       |   |                                                                            |   |   |
| Cost of revenues           |   |  $         133,543            |   |  $          58,253 |
|                       |   |                                                                            |   |   |
| Selling and distribution   |   |          1,118,221                 |   |            364,566 |
|                       |   |                                                                            |   |   |
| General and administrative |   |          1,200,860                 |   |            897,890 |
|                       |   |                                                                            |   |   |
| Research and development   |   |             232,997 |   |            107,508 |
|                       |   |                                                                            |   |   |
| Total                      |   |  $      2,685,621                            |   |  $      1,428,217 |
|                       |   |                                                                            |   |   |

| (15)              | FAIR VALUE OF FINANCIAL INSTRUMENTS: |
|------------------------------------------------------------------------------------|--------------------------------------|

| (16)              | RELATED PARTY TRANSACTIONS |
|------------------------------------------------------------------------------------|----------------------------|

|                           |   | Nine Months Ended                           |    |                                                                                                          | Three Months Ended |
|--------------------------------|--------|---------------------------------------------|---------|---------------------------------------------------------------------------------------------------------------|--------------------|
|                           |   | September 30,                               |    |                                                                                                          |               | September 30, |   |
|                           |   | 2010                                        |    | 2009                                                                                                          |               |   | 2010 |   | 2009 |
| REVENUES                       |   |                                        |    |                                                                                                          |               |   |   |   |   |
| Net product revenues           | $      |       581,104 |  $ |                   - |               | $ |      581,104 |  $ |                   - |
|                           |   |                                        |    |                                                                                                          |               |   |   |   |   |
| Royalties                      |   |       450,000 |    |                   - |               |   |      450,000 |   |                   - |
|                           |   |                                        |    |                                                                                                          |               |   |   |   |   |
| Other revenue (amortization of |   |                                        |    |                                                                                                          |               |   |   |   |   |
| deferred revenue)              |   |    8,487,192                 |    |                   - |               |   |   8,487,192 |   |                   - |
| Total net revenues             |   |    9,518,296                 |    |                   - |               |   |   9,518,296 | $ |                   - |
|                           |   |                                        |    |                                                                                                          |               |   |   |   |   |
| COST OF PRODUCT REVENUES       |   |                                        |    |                                                                                                          |               |   |   |   |   |
| Cost of product revenues       |   |       528,473 |    |                                                                                                          |               |   |      528,473 |   |   |
| Gross profit                   | $      |    8,989,823                 | $       |                   - |               | $ |   8,989,823 | $ |                   - |
|                           |   |                                        |    |                                                                                                          |               |   |   |   |   |

| (17)              | RECENT ACCOUNTING PRONOUNCEMENTS: |
|------------------------------------------------------------------------------------|-----------------------------------|

----

| Product Revenues include                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| · CRINONE 8% (progesterone gel) marketed and sold by us in the U.S. through July  2, 2010, and sold to Watson for resale in the U.S. beginning after July 2, 2010; · CRINONE 8% sold to Merck Serono for resale outside the U.S.; · PROCHIEVE 8% (progesterone gel) sold by us in the U.S. through July 1, 2010 and sold to Watson for resale in the U.S. beginning after July 2, 2010; · PROCHIEVE 4% sold to Ascend Therapeutics, Inc., for resale in the U.S., pursuant to an agreement that terminated on July 23, 2010 and sold to Watson on July 2, 2010 for resale in the U.S. beginning after July 23, 2010; |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| · STRIANT (testosterone buccal system) marketed and sold by us in the U.S.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |

----

|                 | Nine Months Ended            |
|----------------------|------------------------------|
|                 | September 30,                |
|                 | 2010                         |   | 2009 |
| Cash flows:          |                         |   |   |
| Operating activities |  $ (8,859,940)          |   |  $(5,790,965) |
| Investing activities |    35,205,136 |   |        (48,039) |
| Financing activities |   (18,656,782)     |   |        (24,688) |

----

|            | (a) Total Number of Shares (or Units) Purchased | (b) Average Price Paid per Share (or Unit) | (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs | (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs |
|-----------------|-------------------------------------------------|--------------------------------------------|-------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------|
| August 2010 (1) | 3,333,330 shares of Common Stock                | $     0.90        |  ─                                                                                   |  ─                                                                                                               |

|   | (1) | On August 9, 2010, Columbia entered into a Securities Purchase Agreement with Perry Partners International Inc. and Perry Partners, L.P., pursuant to which the Company repurchased, at $0.90 per share, for an aggregate purchase price of approximately $3.0 million, 3,333,330 shares of its Common Stock. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                    | Nine Months Ended                                                                                                   |
|-------------------------|---------------------------------------------------------------------------------------------------------------------|
|                    | September 30,                                                                                                       |
|                    | 2010                                                                                                                | 2009 |
| Risk free interest rate | 1.38%                                                                                                               | 2.40% |
| Expected term           | 4.75                                                                                                                | 4.75 years |
| Dividend yield          |                    - |                     - |
| Expected volatility     | 92.45%                                                                                                              | 93.44% |

----

----

----

| ·   | Clinical trials may show our product candidates to be ineffective for the indications studied or to have harmful side effects; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------|

| ·   | Product candidates may fail to receive regulatory approvals required to bring the products to market; |
|--------------------|-------------------------------------------------------------------------------------------------------|

| ·   | Manufacturing costs or other factors may make our product candidates uneconomical; and |
|--------------------|----------------------------------------------------------------------------------------|

| ·   | The proprietary rights of others and their competing products and technologies may prevent our product candidates from being effectively commercialized. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | The rate of patient enrollment which is a function of factors including the size of the patient population, the proximity of patients to clinical sites, the eligibility criteria for the study, and the nature of the study protocol; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Institutional Review Board, or IRB, approval of the study protocol and the informed consent forms; |
|--------------------|----------------------------------------------------------------------------------------------------|

| ·   | Prior regulatory agency review and approval; |
|--------------------|----------------------------------------------|

| ·   | Analysis of data obtained from clinical activities, which are susceptible to varying interpretations and which interpretations could delay, limit or prevent regulatory approval; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Changes in the policies of regulatory authorities for drug approval during the period of product development; and |
|--------------------|-------------------------------------------------------------------------------------------------------------------|

| ·   | The availability of skilled and experienced staff to conduct and monitor clinical studies and to prepare the appropriate regulatory applications. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Our ability to raise any additional funds that we need to complete our trials; |
|--------------------|--------------------------------------------------------------------------------|

| ·   | The number and outcome of clinical trials conducted by us and/or our collaborators; |
|--------------------|-------------------------------------------------------------------------------------|

| ·   | The number of products we may have in clinical development; |
|--------------------|-------------------------------------------------------------|

| ·   | In licensing or other partnership activities, including the timing and amount of related development funding, license fees or milestone payments; and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Future levels of our revenue. |
|--------------------|-------------------------------|

| ·   | A product candidate may not be deemed to be safe or effective; |
|--------------------|----------------------------------------------------------------|

| ·   | The manufacturing processes or facilities we have selected may not meet the applicable requirements; and |
|--------------------|----------------------------------------------------------------------------------------------------------|

| ·   | Changes in their approval policies or adoption of new regulations may require additional clinical trials or other data. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------|

----

| (a)   | Unregistered Sales of Equity Securities |
|-----------------|-----------------------------------------|

| (b)   | Not applicable. |
|-----------------|-----------------|

| (c)   | Stock Repurchase |
|-----------------|------------------|

|            | (a) Total Number of Shares (or Units) Purchased | (b) Average Price Paid per Share (or Unit) | (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs | (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs |
|-----------------|-------------------------------------------------|--------------------------------------------|-------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------|
| August 2010 (1) | 3,333,330 shares of Common Stock                | $     0.90        |  ─                                                                                   |  ─                                                                                                               |

| (1) | On August 9, 2010, Columbia entered into a Securities Purchase Agreement with Perry Partners International Inc. and Perry Partners, L.P., pursuant to which the Company repurchased, at $0.90 per share, for an aggregate purchase price of approximately $3 million, 3,333,330 shares of its Common Stock. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | None. |
|--------|-------|

| (a)   | Exhibits |
|-----------------|----------|

| 3.1  | Certificate of Amendment to Restated Certificate of Incorporation of Columbia Laboratories, Inc., filed with the Secretary of State of Delaware July 1, 2010. (1) |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 4.1  | Form of Warrant to Purchase Common Stock. (1)                                                                                                                          |
| 10.1 | Second Amended and Restated License and Supply Agreement between Columbia Laboratories (Bermuda) Ltd., and Ares Trading S.A., effective May 19, 2010. (*)         |
| 10.2 | Securities Purchase Agreement, dated as of August 9, 2010 (2)                                                                                                          |
| 10.3 | Investor’s Rights Agreement, dated July 1, 2010. (1)                                                                                                        |
| 10.4 | Watson Supply Agreement, dated July 2, 2010. (1)                                                                                                                  |
| 10.5 | Watson License Agreement, dated July 2, 2010. (1)                                                                                                                 |
| 31.1 | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer of the Company.*                                                                                     |
| 31.2 | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer of the Company.*                                                                                     |
| 32.1 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**                                              |
| 32.2 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**                                              |

|   | * | Filed herewith. |
|--------|---|-----------------|

|   | ** | Furnished herewith. |
|--------|----|---------------------|

|   |  (1) | Incorporated by reference to the Registrant’s Current Report on Form 8-K, dated July 1, 2010 |
|--------|-----------|----------------------------------------------------------------------------------------------------|

|   | (2) | Incorporated by reference to the Registrant’s Current Report on Form 8-K, dated August 9, 2010 |
|--------|-----|------------------------------------------------------------------------------------------------------|

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|   | SIGNATURES |
|--------|------------|