----

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

| Large      accelerated filer [ ]                                             | Accelerated      filer [X]                                                                                             |
|------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------|
| Non-accelerated      filer [ ] (Do not check if a smaller reporting company) |               Smaller      reporting company [ ] |

----

----

|                                                                                        |   | September      30, |         |   | December      31, |    |
|---------------------------------------------------------------------------------------------|--------|--------------------|--------------|--------|-------------------|---------|
|                                                                                        |   | 2008               |         |   | 2007              |    |
|                                                                                        |   | (Unaudited)        |         |   |              |    |
| ASSETS:                                                                                     |   |               |         |   |              |    |
| Cash      and cash equivalents                                                              |   |  $            | 12,825,317   |   |              |  $ | 17,221,811 |   |
| Accounts      receivable, net                                                               |   |               | 5,181,675    |   |              |    | 3,810,993 |   |
|        Inventories                                                                     |   |               | 2,456,242    |   |              |    | 3,047,129 |   |
| Prepaid      expenses and other current assets                                              |   |               | 1,480,187    |   |              |    | 1,287,300 |   |
|          Total current assets                                                |   |               | 21,943,421   |   |              |    | 25,367,233 |   |
|                                                                                        |   |               |         |   |              |    |   |   |
| Property      and equipment, net                                                            |   |               | 935,623      |   |              |    | 651,967 |   |
|        Intangible assets, net                                                          |   |               | 25,076,242   |   |              |    | 28,859,788 |   |
|        Other assets                                                                    |   |               | 1,510,296    |   |              |    | 1,710,289 |   |
| TOTAL      ASSETS                                                                           |   |  $            | 49,465,582   |   |              |  $ | 56,589,277 |   |
|                                                                                        |   |               |         |   |              |    |   |   |
| LIABILITIES      AND STOCKHOLDERS' (DEFICIT) EQUITY                                         |   |               |         |   |              |    |   |   |
| Current      portion of financing agreements                                                |   |  $            | 166,057      |   |              |  $ | 3,786,538 |   |
|        Accounts payable                                                                |   |               | 2,748,894    |   |              |    | 2,215,942 |   |
|        Accrued expenses                                                                |   |               | 6,055,400    |   |              |    | 4,903,881 |   |
|   Total      current liabilities                                                  |   |               | 8,970,351    |   |              |    | 10,906,361 |   |
|        Notes payable                                                                   |   |               | 29,409,037   |   |              |    | 27,536,178 |   |
|        Deferred revenue                                                                |   |               | 318,165      |   |              |    | 3,580,880 |   |
| Long-term      portion of financing agreements                                              |   |               | 12,697,833   |   |              |    | 11,425,601 |   |
| TOTAL      LIABILITIES                                                                      |   |               | 51,395,386   |   |              |    | 53,449,020 |   |
|                                                                                        |   |               |         |   |              |    |   |   |
| Contingently      redeemable Series C Convertible Preferred                                 |   |               |         |   |              |    |   |   |
| Stock,      1,125 shares issued and outstanding (liquidation                                |   |               |         |   |              |    |   |   |
| preference      of $1,125,000) in 2008 and 2007                                             |   |               | 1,125,000    |   |              |    | 1,125,000 |   |
|                                                                                        |   |               |         |   |              |    |   |   |
| Stockholders'      (deficit) equity                                                         |   |               |         |   |              |    |   |   |
|  Preferred      Stock, $0.01 par value; 1,000,000 shares authorized                    |   |               |         |   |              |    |   |   |
|     Series      B Convertible Preferred Stock, 130 shares issued        |   |               |         |   |              |    |   |   |
|       and      outstanding in 2008 and 2007                   |   |               | 1            |   |              |    | 1 |   |
|     Series      E Convertible Preferred Stock, 59,000 shares and 63,547 |   |               |         |   |              |    |   |   |
|      shares      issued and outstanding in 2008 and 2007           |   |               | 590          |   |              |    | 635 |   |
|  Common      Stock, $0.01 par value; 100,000,000 authorized;                           |   |               |         |   |              |    |   |   |
|        53,752,420 and 51,730,151 shares issued and 53,688,776 and                      |   |               |         |   |              |    |   |   |
|        and 51,712,151 outstanding in 2008 and 2007 respectively                        |   |               | 537,524      |   |              |    | 517,302 |   |
| Capital      in excess of par value                                                         |   |               | 228,055,635  |   |              |    | 222,376,941 |   |
| Less      cost of 63,644 and 18,000 treasury shares in 2008 and 2007                        |   |               | (189,229     | )      |              |    | (54,030 | ) |
|        Accumulated deficit                                                             |   |               | (231,658,296 | )      |              |    | (221,033,196 | ) |
| Accumulated      other comprehensive income                                                 |   |               | 198,971      |   |              |    | 207,604 |   |
| TOTAL      STOCKHOLDERS' (DEFICIT) EQUITY                                                   |   |               | (3,054,804   | )      |              |    | 2,015,257 |   |
| TOTAL      LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY                                   |   |  $            | 49,465,582   |   |              |  $ | 56,589,277 |   |
|                                                                                        |   |               |         |   |              |    |   |   |
|                                                                                        |   |               |         |   |              |    |   |   |
|                                                                                        |   |               |         |   |              |    |   |   |

----

|                                                                                                                                                                                                  |   |   | Nine      Months Ended |        |   | Three      Months Ended |      |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------------------|-------------|--------|-------------------------|-----------|
|                                                                                                                                                                                             |   |   | September      30,     |        |   | September      30,      |      |
|                                                                                                                                                                                                  |   |   |                   |        |   | Restated                |      |   |   |   |   | Restated |   |
|                                                                                                                                                                                                  |   |   | 2008                   |        |   | 2007                    |      |   | 2008 |   |   | 2007 |   |
|                                                                                                                                                                                                  |   |   |                   |        |   |                    |      |   |   |   |   |   |   |
| NET      REVENUES                                                                                                                                                                                     |   |   |  $                | 29,270,581  |   |                    |  $   | 21,279,713 |   |   |  $ | 11,138,639 |   |   |  $ | 7,308,079 |   |
|                                                                                                                                                                                                  |   |   |                   |        |   |                    |      |   |   |   |   |   |   |   |   |   |   |
| COST      OF REVENUES                                                                                                                                                                                 |   |   |                   | 8,769,496   |   |                    |      | 6,604,558 |   |   |   | 2,859,590 |   |   |   | 1,729,082 |   |
| Gross      profit                                                                                                                                                                                     |   |   |                   | 20,501,085  |   |                    |      | 14,675,155 |   |   |   | 8,279,049 |   |   |   | 5,578,997 |   |
|                                                                                                                                                                                                  |   |   |                   |        |   |                    |      |   |   |   |   |   |   |   |   |   |   |
| OPERATING      EXPENSES:                                                                                                                                                                              |   |   |                   |        |   |                    |      |   |   |   |   |   |   |   |   |   |
| Selling      and distribution                                                                                                                                                                         |   |   |                   | 9,902,362   |   |                    |      | 6,908,326 |   |   |   | 3,515,364 |   |   |   | 2,847,194 |   |
| General      and administrative                                                                                                                                                                       |   |   | 6,628,649              |        |   |                    | 5,813,335 |   |   |   | 2,079,201 |   |   |   | 1,913,562 |   |
| Research      and development                                                                                                                                                                         |   |   | 5,051,949              |        |   |                    | 3,803,257 |   |   |   | 1,510,186 |   |   |   | 1,443,657 |   |
| Amortization      of licensing right                                                                                                                                                                  |   |   | 3,783,546              |        |   |                    | 3,744,586 |   |   |   | 1,261,182 |   |   |   | 1,261,182 |   |
|                             Total      operating expenses |   |   |                   | 25,366,506  |   |                    |      | 20,269,504 |   |   |   | 8,365,933 |   |   |   | 7,465,595 |   |
|                                                                                                                                                                                                  |   |   |                   |        |   |                    |      |   |   |   |   |   |   |   |   |   |   |
|                                  Loss      from operations     |   |   |                   | (4,865,421  | )      |                    |      | (5,594,349 | ) |   |   | (86,884 | ) |   |   | (1,886,598 | ) |
| OTHER      INCOME (EXPENSE):                                                                                                                                                                          |   |   |                   |        |   |                    |      |   |   |   |   |   |   |   |   |   |
| Interest      income                                                                                                                                                                                  |   |   |                   | 249,496     |   |                    |      | 739,895 |   |   |   | 58,836 |   |   |   | 234,306 |   |
| Interest      expense                                                                                                                                                                                 |   |   |                   | (5,871,513  | )      |                    |      | (5,908,736 | ) |   |   | (1,998,832 | ) |   |   | (2,004,321 | ) |
| Other,      net                                                                                                                                                                                       |   |   |                   | (137,665    | )      |                    |      | (86,522 | ) |   |   | (23,256 | ) |   |   | (67,749 | ) |
|                                                                                                                                                                                                  |   |   |                   | (5,759,682  | )      |                    |      | (5,255,363 | ) |   |   | (1,963,252 | ) |   |   | (1,837,764 | ) |
|                                                                                                                                                                                                  |   |   |                   |        |   |                    |      |   |   |   |   |   |   |   |   |   |   |
| Net      loss                                                                                                                                                                                         |   |   |  $                | (10,625,103 | )      |                    |  $   | (10,849,712 | ) |   |  $ | (2,050,136 | ) |   |  $ | (3,724,362 | ) |
|                                                                                                                                                                                                  |   |   |                   |        |   |                    |      |   |   |   |   |   |   |   |   |   |   |
| NET      LOSS PER COMMON SHARE:                                                                                                                                                                       |   |   |                   |        |   |                    |      |   |   |   |   |   |   |   |   |   |
| Basic      and diluted                                                                                                                                                                                |   |   |  $                | (0.20       | )      |                    |  $   | (0.21 | ) |   |  $ | (0.04 | ) |   |  $ | (0.07 | ) |
|                                                                                                                                                                                                  |   |   |                   |        |   |                    |      |   |   |   |   |   |   |   |   |   |   |
| WEIGHTED      AVERAGE NUMBER OF                                                                                                                                                                       |   |   |                   |        |   |                    |      |   |   |   |   |   |   |   |   |   |
| COMMON      SHARES OUTSTANDING:                                                                                                                                                                       |   |   |                   |        |   |                    |      |   |   |   |   |   |   |   |   |   |
| Basic      and diluted                                                                                                                                                                                |   |   |                   | 52,073,900  |   |                    |      | 50,955,758 |   |   |   | 52,613,653 |   |   |   | 51,432,770 |   |
|                                                                                                                                                                                                  |   |   |                   |        |   |                    |      |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                  |   |   |                   |        |   |                    |      |   |   |   |   |   |   |   |   |   |   |

----

|                                    |   |  Nine      Months Ended |        |   |  Three      Months Ended |    |
|-----------------------------------------|--------|------------------------------|-------------|--------|-------------------------------|---------|
|                                    |   | September      30,           |        |   | September      30,            |    |
|                                    |   |                         |        |   | Restated                      |    |   |   |   |   | Restated |   |
|                                    |   | 2008                         |        |   | 2007                          |    |   | 2008 |   |   | 2007 |   |
|                                    |   |                         |        |   |                          |    |   |   |   |   |   |   |
| NET      LOSS                           |   |  $                      | (10,625,103 | )      |                          |  $ | (10,849,712 | ) |   |  $ | (2,050,136 | ) |   |  $ | (3,724,362 | ) |
|                                    |   |                         |        |   |                          |    |   |   |   |   |   |   |   |   |   |   |
| Other      comprehensive income (loss): |   |                         |        |   |                          |    |   |   |   |   |   |   |   |   |   |   |
| Foreign      currency translation       |   |                         | (8,633      | )      |                          |    | 8,921 |   |   |   | (18,627 | ) |   |   | 5,319 |   |
|                                    |   |                         |        |   |                          |    |   |   |   |   |   |   |   |   |   |   |
| Comprehensive      loss                 |   |  $                      | (10,633,736 | )      |                          |  $ | (10,840,791 | ) |   |  $ | (2,068,763 | ) |   |  $ | (3,719,043 | ) |
|                                    |   |                         |        |   |                          |    |   |   |   |   |   |   |   |   |   |   |

----

|                                                     |   |        Nine      Months Ended September 30,                                          |
|----------------------------------------------------------|--------|-------------------------------------------------------------------------------------------|
|                                                     |   |                                                                                           |   |   |   |   | Restated |
|                                                     |   |                                                                            |   | 2008 |   |   | 2007 |
| CASH      FLOWS FROM OPERATING ACTIVITIES:               |   |                                                                                      |   |   |   |
| Net      loss                                            |   |                                                                                      | $  |  (10,625,103) |   | $  |          (10,849,712) |
| Adjustments      to reconcile net loss to net            |   |                                                                                      |   |   |   |
|  cash      used in operating activities-            |   |                                                                                      |   |   |   |
| Depreciation      and amortization                       |   |                                                                                      |        4,124,526 |   |   | 4,084,445 |
| Amortization      on beneficial conversion features      |   |        1,066,158                                       |   |   | 933,767 |
| Amortization      on warrant valuation                   |   |           806,701                       |   |   | 718,432 |
| Provision      for doubtful accounts                     |   |               4,267 |   |   |                          - |
| Provision      for sales returns                         |   |                                                                                      |        1,095,853 |   |   |                  641,023 |
| Writedown      of inventories                            |   |                                                                                      |           746,905 |   |   |                          - |
| Stock      based compensation                            |   |                                                                                      |        1,061,865 |   |   |               1,319,712 |
| Interest      expense on financing agreements            |   |        1,260,678                                       |   |   |               1,095,073 |
| Acceleration      of Ardana deferred revenue             |   |       (2,891,188)                                           |   |   |                          - |
| Loss      on disposal of fixed assets                    |   |               3,048 |   |   |                          - |
| Changes      in assets and liabilities-                  |   |                                                                                      |   |   |   |   |
|  (Increase)      decrease in:                       |   |                                                                                      |   |   |   |   |
| Accounts      receivable                                 |   |                                                                                      |   |       (1,374,949) |   |   | (1,633,986) |
| Inventories                                              |   |                                                                                      |   |          (156,018) |   |   | (137,984) |
| Prepaid      expenses and other current assets           |   |          (192,887)                           |   |   | 614,318 |
| Other      assets                                        |   |                                                                                      |   |               4,867 |   |   | (278,907) |
|  Increase      (decrease) in:                       |   |                                                                                      |   |   |   |   |   |
| Accounts      payable                                    |   |                                                                                      |   |           532,952 |   |   | (661,130) |
| Accrued      expenses                                    |   |                                                                                      |   |           (12,310) |   |   | (1,453,558) |
| Deferred      revenue                                    |   |                                                                                      |   |          (371,527) |   |   | (422,297) |
| Net      cash used in operating activities               |   | (4,916,162)                                                                               |   |   | (6,030,804) |
|                                                     |   |                                                                                      |   |   |   |   |   |
| CASH      FLOWS FROM INVESTING ACTIVITIES:               |   |                                                                                      |   |   |   |
| Purchase      of property and equipment                  |   |          (432,558)                           |   |   |                    (9,085) |
| Net      cash used in investing activities               |   |          (432,558)                           |   |   |                    (9,085) |
|                                                     |   |                                                                                      |   |   |   |   |   |
| CASH      FLOWS FROM FINANCING ACTIVITIES:               |   |                                                                                      |   |   |   |
| Proceeds      from sale of common stock net              |   |        4,095,628                                       |   |   |                          - |
| Proceeds      from exercise of options                   |   |                                                                                      |           583,566 |   |   |                   63,241 |
| Payment      for purchase of treasury stock              |   |          (135,199)                           |   |   |                  (13,260) |
| Payments      pursuant to financing agreements           |   |       (3,540,949)                                           |   |   |                          - |
| Dividends      paid                                      |   |                                                                                      |   |           (42,187) |   |   | (62,832) |
| Net      cash provided by (used in) financing activities |   |           960,859                       |   |   | (12,851) |
|                                                     |   |                                                                                      |   |   |   |   |   |
| (Continued)                                              |
|                                                     |   |                                                                                      |   |   |   |   |   |
|                                                     |   |                                                                                      |   |   |   |
|                                                     |   |                                                                                      |   |   |   |   |   |

----

|                                               |   |  Nine      Months Ended September 30, |       |
|----------------------------------------------------|--------|--------------------------------------------|------------|
|                                               |   |                                       |       |   | Restated |   |
|                                               |   | 2008                                       |       |   | 2007 |   |
|                                               |   |                                       |       |   |   |   |
| EFFECT      OF EXCHANGE RATE CHANGES ON CASH       |   |                                       | (8,633     | ) |   |   | 8,921 |   |
|                                               |   |                                       |       |   |   |   |   |   |
| NET      DECREASE IN CASH                          |   |                                       | (4,396,494 | ) |   |   | (6,043,819 | ) |
|                                               |   |                                       |       |   |   |   |   |   |
| CASH,      BEGINNING OF PERIOD                     |   |                                       | 17,221,811 |   |   |   | 25,270,377 |   |
|                                               |   |                                       |       |   |   |   |   |   |
| CASH      END OF PERIOD                            |   |  $                                    | 12,825,317 |   |   |  $ | 19,226,558 |   |
|                                               |   |                                       |       |   |   |   |   |   |
| NON-CASH      INVESTING ACTIVITES                  |   |                                       |       |   |   |   |   |   |
|                                               |   |                                       |       |   |   |   |   |   |
| Accrued      U.S. CRINONE Licensing                |   |                                       |       |   |   |   |   |   |
| Right      purchase cost increase                  |   |                                       | -          |   |   |  $ | 1,000,000 |   |
|                                               |   |                                       |       |   |   |   |   |   |
| NON-CASH      FINANCING ACTIVITIES                 |   |                                       |       |   |   |   |   |   |
|                                               |   |                                       |       |   |   |   |   |   |
| Conversion      of preferred Series C&E shares |   |                                       | $2,274     |   |   |   | $15,751 |   |
|                                               |   |                                       |       |   |   |   |   |   |
| SUPPLEMENTAL      INFORMATION                      |   |                                       |       |   |   |   |   |   |
|                                               |   |                                       |       |   |   |   |   |   |
| Cash      paid for interest expense                |   |  $                                    | 2,610,528  |   |   |  $ | 2,269,352 |   |
|                                               |   |                                       |       |   |   |   |   |   |
|                                               |   |                                       |       |   |   |   |   |   |

----

----

|                                              | Nine      months ended             |   | Nine      months ended             |
|---------------------------------------------------|------------------------------------|--------|------------------------------------|
|                                              | September      30,                 |   | September      30,                 |
|                                              | 2008                               |   | 2007                               |
|                                              |                               |   |                               |
| Balance      at beginning of year                 | $    1,923,769 |   | $    1,240,235 |
| Addition      related to CRINONE® purchase   | -                                  |   | 1,000,000                          |
|                                              | 1,923,769                          |   | 2,240,235                          |
| Provision:                                        |                               |   |                               |
|   Related      to current period sales* | 445,853                            |   | 368,015                            |
|   Related      to prior period sales    | 650,000                            |   | 273,008                            |
|                                              | 1,095,853                          |   | 641,023                            |
|                                              |                               |   |                               |
| Returns:                                          |                               |   |                               |
|   Related      to prior period sales    |  (1,208,819)                  |   | (1,172,867)                        |
|                                              |                               |   |                               |
|                                              |                               |   |                               |
| Balance      at end of quarter                    | $   1,810,803       |   | $   1,708,390       |

|                 |   | September      30, |      |   | December      31, |    |
|----------------------|--------|--------------------|-----------|--------|-------------------|---------|
|                 |   | 2008               |      |   | 2007              |    |
| Finished      goods  |   |  $            | 1,430,512 |   |              |  $ | 1,734,052 |   |
| Work      in Process |   |               | 252,325   |   |              |    | - |   |
| Raw      materials   |   |               | 773,405   |   |              |    | 1,313,077 |   |
|                 |   |               |      |   |              |    |   |   |
|                 |   |  $            | 2,456,242 |   |              |  $ | 3,047,129 |   |
|                 |   |               |      |   |              |    |   |   |

----

|                                   |   | September      30, |                                                                                                    |   | December      31, |    |
|----------------------------------------|--------|--------------------|---------------------------------------------------------------------------------------------------------|--------|-------------------|---------|
|                                   |   | 2008               |                                                                                                    |   | 2007              |    |
| July      31, 2002 financing agreement |   |  $            |                       - |   |              |  $ | 3,620,653 |   |
| March      5, 2003 financing agreement |   |               | 12,863,890                                                                                              |   |              |    | 11,591,486 |   |
|                                   |   |               | 12,863,890                                                                                              |   |              |    | 15,212,139 |   |
| Less:      current portion             |   |               | 166,057                                                                                                 |   |              |    | 3,786,538 |   |
|                                   |   |  $            | 12,697,833                                                                                              |   |              |  $ | 11,425,601 |   |
|                                   |   |               |                                                                                                    |   |              |    |   |   |

----

|                               |   |     |       |   |            |    |
|------------------------------------|--------|----------|------------|--------|-----------------|---------|
|                               |   | Net      |       |   | Long      Lived |    |
|                               |   | Revenues |       |   | Assets          |    |
|                               |   |     |       |   |            |    |
| As      of and for the nine months |   |     |       |   |            |    |
| ended      September 30, 2008      |   |     |       |   |            |    |
| United      States                 |   |  $  | 18,288,115 |   |            |  $ | 26,517,858 |   |
|                               |   |     |       |   |            |    |   |   |
| Switzerland                        |   |     | 7,498,310  |   |            |    | - |   |
| Other      European countries      |   |     | 3,484,156  |   |            |    | 1,004,303 |   |
| Total      International           |   |     | 10,982,466 |   |            |    | 1,004,303 |   |
| Total                              |   |  $  | 29,270,581 |   |            |  $ | 27,522,161 |   |
|                               |   |     |       |   |            |    |   |   |
| As      of and for the nine months |   |     |       |   |            |    |   |   |
| ended      September 30, 2007      |   |     |       |   |            |    |   |   |
| United      States                 |   |  $  | 15,584,172 |   |            |  $ | 31,756,916 |   |
|                               |   |     |       |   |            |    |   |   |
| Switzerland                        |   |     | 5,090,945  |   |            |    | - |   |
| Other      European countries      |   |     | 604,596    |   |            |    | 611,140 |   |
| Total      International           |   |     | 5,695,541  |   |            |    | 611,140 |   |
| Total                              |   |  $  | 21,279,713 |   |            |  $ | 32,368,056 |   |
|                               |   |     |       |   |            |    |   |   |

----

|                                                   |   |  Nine      Months Ended |        |   |  Three      Months Ended |    |
|--------------------------------------------------------|--------|------------------------------|-------------|--------|-------------------------------|---------|
|                                                   |   | September      30,           |        |   | September      30,            |    |
|                                                   |   |                         |        |   | Restated                      |    |   |   |   |   | Restated |   |
|                                                   |   | 2008                         |        |   | 2007                          |    |   | 2008 |   |   | 2007 |   |
|                                                   |   |                         |        |   |                          |    |   |   |   |   |   |   |
| Net      loss                                          |   |  $                      | (10,625,103 | )      |                          |  $ | (10,849,712 | ) |   |  $ | (2,050,134 | ) |   |  $ | (3,724,362 | ) |
| Less:      Preferred stock dividends                   |   |                         | (42,186     | )      |                          |    | (62,832 | ) |   |   | (14,062 | ) |   |   | (14,062 | ) |
|                                                   |   |                         |        |   |                          |    |   |   |   |   |   |   |   |   |   |   |
| Net      loss applicable to                            |   |                         |        |   |                          |    |   |   |   |   |   |   |   |   |   |   |
| Common      Stock                                      |   |  $                      | (10,667,289 | )      |                          |  $ | (10,912,544 | ) |   |  $ | (2,064,196 | ) |   |  $ | (3,738,424 | ) |
|                                                   |   |                         |        |   |                          |    |   |   |   |   |   |   |   |   |   |   |
| Basic      and diluted:                                |   |                         |        |   |                          |    |   |   |   |   |   |   |   |   |   |   |
| Weighted      average number of                        |   |                         |        |   |                          |    |   |   |   |   |   |   |   |   |   |   |
|     common      shares outstanding |   |                         | 52,073,900  |   |                          |    | 50,955,758 |   |   |   | 52,613,653 |   |   |   | 51,432,770 |   |
|                                                   |   |                         |        |   |                          |    |   |   |   |   |   |   |   |   |   |   |
| Basic      and diluted net loss per common share       |   |  $                      | (0.20       | )      |                          |  $ | (0.21 | ) |   |  $ | (0.04 | ) |   |  $ | (0.07 | ) |
|                                                   |   |                         |        |   |                          |    |   |   |   |   |   |   |   |   |   |   |

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|                          |   | Nine      Months                      |   | Nine      Months        |
|-------------------------------|--------|---------------------------------------|--------|-------------------------|
|                          |   | Ended                                 |   | Ended                   |
| Stock      Based Compensation |   | September      30, 2008               |   | September      30, 2007 |
|                          |   |                                  |   |                    |   |   |   |
| Cost      of Revenues         |   | $     52,482 |   |                    |  $     120,804 |   |   |
|                          |   |                                  |   |                    |   |   |   |
| Selling      and distribution |   |  139,521                         |   |                    |  129,252 |   |   |
|                          |   |                                  |   |                    |   |   |   |
| General      Administrative   |   |  754,721                         |   |                    |   802,543 |   |   |
|                          |   |                                  |   |                    |   |   |   |
| Research      and development |   |  73,523                          |   |                    |  138,674 |   |   |
|                          |   |                                  |   |                    |   |   |   |
| Consultants                   |   |  41,618                          |   |                    |  128,439 |   |   |
| Total                         |   | $       1,061,865                |   |                    |  $       1,319,712 |   |   |
|                          |   |                                  |   |                    |   |   |   |

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| Progesterone      Products |   |         CRINONE ® 8%      (progesterone gel) marketed by the Company in the U.S.         CRINONE ® 8%      sold to Merck Serono for foreign markets         PROCHIEVE ® 8%      (progesterone gel) marketed by the Company in the U.S.         PROCHIEVE ® 4%      sold to Ascend Therapeutics, Inc. for the U.S. market                                                                                                                                                                        |
|----------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| Other      Products        |   |         STRIANT®      (testosterone buccal system) marketed by the Company in the      U.S.         STRIANT®      sold to our partners for foreign markets         Replens®      Vaginal Moisturizer sold to Lil’ Drug Store Products, Inc (“Lil’ Drug      Store”)      for foreignmarkets         RepHresh®      Vaginal Gel sold to Lil’ Drug Store on a worldwide basis         Royalty and licensingrevenues |

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|                      |   | Nine      Months Ended |
|---------------------------|--------|------------------------|
|                      |   | September      30,     |
|                      |   |                   |   | Restated |
|                      |   | 2008                   |   | 2007 |
| Cash      flows:          |   |                   |   |   |
| Operating      activities |   | $      (4,916,162)     |   | $(6,030,804) |
| Investing      activities |   | (432,558)              |   | (9,085) |
| Financing      activities |   | 960,859           |   | (12,851) |

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|                         | Nine      months ended September 30,      2008 |   | Nine      months ended September 30,      2007 |
|------------------------------|------------------------------------------------|--------|------------------------------------------------|
| Risk      free interest rate | 2.47%                                          |   | 4.55%                                          |
| Expected      term           | 4.75      years                                |   | 4.51      years                                |
| Dividend      yield          | 0.0                                            |   | 0.0                                            |
| Expected      volatility     | 84.28%                                         |   | 85.68%                                         |

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

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

|   |  (*) | Filed      herewith |
|--------|-----------|---------------------|

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