----

| [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 [ ] |

----

----

----

|                                                                                        |   | June      30, |         |   | December      31, |   |
|---------------------------------------------------------------------------------------------|--------|---------------|--------------|--------|-------------------|--------|
|                                                                                        |   | 2008          |         |   | 2007              |   |
|                                                                                        |   | (Unaudited)   |         |   |              |   |
| ASSETS:                                                                                     |   |          |         |   |              |   |
| Cash      and cash equivalents                                                              |   | $             | 10,570,820   |   |              | $      | 17,221,811 |   |
| Accounts      receivable, net                                                               |   |          | 4,292,466    |   |              |   | 3,810,993 |   |
|        Inventories                                                                     |   |          | 3,722,981    |   |              |   | 3,047,129 |   |
| Prepaid      expenses and other current assets                                              |   |          | 681,894      |   |              |   | 1,287,300 |   |
|   Total      current assets                                                       |   |          | 19,268,161   |   |              |   | 25,367,233 |   |
|                                                                                        |   |          |         |   |              |   |   |   |
| Property      and equipment, net                                                            |   |          | 688,020      |   |              |   | 651,967 |   |
|        Intangible assets, net                                                          |   |          | 26,337,424   |   |              |   | 28,859,788 |   |
|        Other assets                                                                    |   |          | 1,590,501    |   |              |   | 1,710,289 |   |
| TOTAL      ASSETS                                                                           |   | $             | 47,884,106   |   |              | $      | 56,589,277 |   |
|                                                                                        |   |          |         |   |              |   |   |   |
| LIABILITIES      AND STOCKHOLDERS' EQUITY                                                   |   |          |         |   |              |   |   |   |
| Current      portion of financing agreements                                                |   | $             | 165,888      |   |              | $      | 3,786,538 |   |
|        Accounts payable                                                                |   |          | 3,236,060    |   |              |   | 2,215,942 |   |
|        Accrued expenses                                                                |   |          | 4,616,761    |   |              |   | 4,903,881 |   |
|          Total current liabilities                                           |   |          | 8,018,709    |   |              |   | 10,906,361 |   |
|        Notes payable                                                                   |   |          | 28,764,380   |   |              |   | 27,536,178 |   |
|        Deferred revenue                                                                |   |          | 3,222,015    |   |              |   | 3,580,880 |   |
| Long-term      portion of financing agreements                                              |   |          | 12,254,619   |   |              |   | 11,425,601 |   |
| TOTAL      LIABILITIES                                                                      |   |          | 52,259,723   |   |              |   | 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;      52,378,676 and 51,730,151 shares issued            |   |          |         |   |              |   |   |   |
|     and      52,319,032 and 51,712,151 outstanding                      |   |          |         |   |              |   |   |   |
|     in      2008 and 2007 respectively                                  |   |          | 523,787      |   |              |   | 517,302 |   |
| Capital      in excess of par value                                                         |   |          | 223,537,759  |   |              |   | 222,376,941 |   |
| Less      cost of 59,644 and 18,000 treasury shares in 2008 and 2007                        |   |          | (172,189     | )      |              |   | (54,030 | ) |
|        Accumulated deficit                                                             |   |          | (229,608,163 | )      |              |   | (221,033,196 | ) |
| Accumulated      other comprehensive income                                                 |   |          | 217,598      |   |              |   | 207,604 |   |
| TOTAL      STOCKHOLDERS' (DEFICIT) EQUITY                                                   |   |          | (5,500,617   | )      |              |   | 2,015,257 |   |
| TOTAL      LIABILITIES AND STOCKHOLDERS' (DEFICIT)                                          |   |          |         |   |              |   |   |   |
| EQUITY                                                                                      |   | $             | 47,884,106   |   |              | $      | 56,589,277 |   |
|                                                                                        |   |          |         |   |              |   |   |   |
|                                                                                        |   |          |         |   |              |   |   |   |
| See      notes to condensed consolidated financial statements                               |   |          |         |   |              |   |   |   |

----

|                                      |   |   | Six      Months Ended |       |   | Three      Months Ended |      |
|-------------------------------------------|--------|--------|-----------------------|------------|--------|-------------------------|-----------|
|                                      |   |   | June      30,         |       |   | June      30,           |      |
|                                      |   |   |                  |       |   | Restated                |      |   |   |   |   | Restated |   |
|                                      |   |   | 2008                  |       |   | 2007                    |      |   | 2008 |   |   | 2007 |   |
|                                      |   |   |                  |       |   |                    |      |   |   |   |   |   |   |
| NET      REVENUES                         |   |   | $                     | 18,332,549 |   |                    | $         | 13,971,634 |   |   | $ | 9,263,821 |   |   | $ | 7,287,014 |   |
|                                      |   |   |                  |       |   |                    |      |   |   |   |   |   |   |   |   |   |   |
| COST      OF REVENUES                     |   |   |                  | 5,909,906  |   |                    |      | 4,875,476 |   |   |   | 2,949,809 |   |   |   | 2,803,289 |   |
| Gross      profit                         |   |   |                  | 12,422,643 |   |                    |      | 9,096,158 |   |   |   | 6,314,012 |   |   |   | 4,483,725 |   |
|                                      |   |   |                  |       |   |                    |      |   |   |   |   |   |   |   |   |   |   |
| OPERATING      EXPENSES:                  |   |   |                  |       |   |                    |      |   |   |   |   |   |   |   |   |   |
| Selling      and distribution             |   |   |                  | 6,587,605  |   |                    |      | 4,061,132 |   |   |   | 3,328,039 |   |   |   | 2,163,850 |   |
| General      and administrative           |   |   | 4,549,448             |       |   |                    | 3,899,773 |   |   |   | 2,429,537 |   |   |   | 1,915,248 |   |
| Research      and development             |   |   | 3,541,763             |       |   |                    | 2,359,600 |   |   |   | 1,695,156 |   |   |   | 1,008,699 |   |
| Amortization      of licensing right      |   |   | 2,522,364             |       |   |                    | 2,483,404 |   |   |   | 1,261,182 |   |   |   | 1,261,183 |   |
|        Total      operating expenses |   |   |                  | 17,201,180 |   |                    |      | 12,803,909 |   |   |   | 8,713,914 |   |   |   | 6,348,980 |   |
|                                      |   |   |                  |       |   |                    |      |   |   |   |   |   |   |   |   |   |   |
|        Loss      from operations     |   |   |                  | (4,778,537 | )      |                    |      | (3,707,751 | ) |   |   | (2,399,902 | ) |   |   | (1,865,255 | ) |
| OTHER      INCOME (EXPENSE):              |   |   |                  |       |   |                    |      |   |   |   |   |   |   |   |   |   |
| Interest      income                      |   |   |                  | 190,660    |   |                    |      | 505,589 |   |   |   | 54,339 |   |   |   | 242,033 |   |
| Interest      expense                     |   |   |                  | (3,872,681 | )      |                    |      | (3,904,416 | ) |   |   | (1,953,595 | ) |   |   | (1,969,862 | ) |
| Other,      net                           |   |   |                  | (114,409   | )      |                    |      | (18,773 | ) |   |   | (27,013 | ) |   |   | 3,709 |   |
|                                      |   |   |                  | (3,796,430 | )      |                    |      | (3,417,600 | ) |   |   | (1,926,269 | ) |   |   | (1,724,120 | ) |
|                                      |   |   |                  |       |   |                    |      |   |   |   |   |   |   |   |   |   |   |
| Net      loss                             |   |   | $                     | (8,574,967 | )      |                    | $         | (7,125,351 | ) |   | $ | (4,326,171 | ) |   | $ | (3,589,375 | ) |
|                                      |   |   |                  |       |   |                    |      |   |   |   |   |   |   |   |   |   |   |
| NET      LOSS PER COMMON SHARE:           |   |   |                  |       |   |                    |      |   |   |   |   |   |   |   |   |   |
| Basic      and diluted                    |   |   | $                     | (0.17      | )      |                    | $         | (0.14 | ) |   | $ | (0.08 | ) |   | $ | (0.07 | ) |
|                                      |   |   |                  |       |   |                    |      |   |   |   |   |   |   |   |   |   |   |
| WEIGHTED      AVERAGE NUMBER OF           |   |   |                  |       |   |                    |      |   |   |   |   |   |   |   |   |   |
| COMMON      SHARES OUTSTANDING:           |   |   |                  |       |   |                    |      |   |   |   |   |   |   |   |   |   |
| Basic      and diluted                    |   |   |                  | 52,083,106 |   |                    |      | 50,713,299 |   |   |   | 52,127,332 |   |   |   | 51,342,528 |   |
|                                      |   |   |                  |       |   |                    |      |   |   |   |   |   |   |   |   |   |   |
|                                      |   |   |                  |       |   |                    |      |   |   |   |   |   |   |   |   |   |   |

----

|                                          |   |  Six      Months Ended |       |   |  Three      Months Ended |   |
|-----------------------------------------------|--------|-----------------------------|------------|--------|-------------------------------|--------|
|                                          |   | June      30,               |       |   | June      30,                 |   |
|                                          |   |                        |       |   | Restated                      |   |   |   |   |   | Restated |   |
|                                          |   | 2008                        |       |   | 2007                          |   |   | 2008 |   |   | 2007 |   |
|                                          |   |                        |       |   |                          |   |   |   |   |   |   |   |
| NET      LOSS                                 |   | $                           | (8,574,967 | )      |                          | $      | (7,125,351 | ) |   | $ | (4,326,171 | ) |   | $ | (3,589,375 | ) |
|                                          |   |                        |       |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Other      comprehensive income (loss):       |   |                        |       |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Foreign      currency translation, net of tax |   |                        | 9,994      |   |                          |   | 3,602 |   |   |   | 89 |   |   |   | 3,149 |   |
|                                          |   |                        |       |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive      loss                       |   | $                           | (8,564,973 | )      |                          | $      | (7,121,749 | ) |   | $ | (4,326,082 | ) |   | $ | (3,586,226 | ) |
|                                          |   |                        |       |   |                          |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                |                                                                                                                |                                                                                                                                      | Six      Months Ended June 30,                                                                                                                                                  |
|-----------------------------------------------------|---------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                |                                                                                                                |                                                                                                                                      |                                                                                                                                                                            |   | Restated |
|                                                |                                                                                                                |                                                                                                                                      | 2008                                                                                                                                                                            |   | 2007 |
| CASH      FLOWS FROM OPERATING ACTIVITIES:          |                                                                                                                |                                                                                                                                      |                                                                                                                                                                            |
| Net      loss                                       |                                                                                                                | $                                                                                                                                         | (8,574,967)                                                                                                                                                                     |   |  $         (7,125,351) |
| Adjustments      to reconcile net loss to net       |                                                                                                                |                                                                                                                                      |                                                                                                                                                                            |   |
| cash      used in operating activities-             |                                                                                                                |                                                                                                                                      |                                                                                                                                                                            |   |
| Depreciation      and amortization                  |                                                                                                                |                2,756,842                                       |                                                                                                                                                                            | 2,710,728 |
| Amortization      on beneficial conversion features |                   698,533 |                                                                                                                                      | 613,208                                                                                                                                                                         |
| Amortization      on warrant valuation              |                                                                                                                |                   529,669                       |                                                                                                                                                                            | 472,819 |
| Provision      for doubtful accounts                |                                                                                                                |                       7,130 |                                                                                                                                                                            |                              - |
| Provision      for sales returns                    |                                                                                                                |                                                                                                                                      |                   958,369                                                             |   |                   495,784 |
| Writedown      of inventories                       |                                                                                                                |                                                                                                                                      |                     63,416                                                  |   |                              - |
| Stock      based compensation                       |                                                                                                                |                                                                                                                                      |                   718,803                                                             |   |                   957,143 |
| Interest      expense on financing agreements       |                   749,318 |                                                                                                                                      |                   758,886                                                             |
| Loss      on disposal of fixed assets               |                                                                                                                |                       2,300 |                                                                                                                                                                            |                              - |
| Changes      in assets and liabilities-             |                                                                                                                |                                                                                                                                      |                                                                                                                                                                            |   |
| (Increase)      decrease in:                        |                                                                                                                |                                                                                                                                      |                                                                                                                                                                            |   |   |
| Accounts      receivable                            |                                                                                                                |                                                                                                                                      |                 (488,603)                                                                       |   | (1,909,781) |
| Inventories                                         |                                                                                                                |                                                                                                                                      |                 (739,268)                                                                       |   | (79,502) |
| Prepaid      expenses and other current assets      |                   605,406 |                                                                                                                                      | 520,423                                                                                                                                                                         |
| Other      assets                                   |                                                                                                                |                                                                                                                                      |                     (8,858)                                                 |   | (205,032) |
|  Increase      (decrease) in:                  |                                                                                                                |                                                                                                                                      |                                                                                                                                                                            |   |   |
| Accounts      payable                               |                                                                                                                |                                                                                                                                      |                1,020,118                                                                             |   | (506,525) |
| Accrued      expenses                               |                                                                                                                |                                                                                                                                      |              (1,241,864)                                                                                       |   | (1,687,197) |
| Deferred      revenue                               |                                                                                                                |                                                                                                                                      |                 (358,865)                                                                       |   | (242,795) |
| Net      cash used in operating activities          |                                                                                                                | (3,302,521)                                                                                                                               |                                                                                                                                                                            | (5,227,192) |
|                                                |                                                                                                                |                                                                                                                                      |                                                                                                                                                                            |   |   |
| CASH      FLOWS FROM INVESTING ACTIVITIES:          |                                                                                                                |                                                                                                                                      |                                                                                                                                                                            |
| Purchase      of property and equipment             |                                                                                                                |                 (147,809)                                 |                                                                                                                                                                            |                     (1,497) |
| Net      cash used in investing activities          |                                                                                                                |                 (147,809)                                 |                                                                                                                                                                            |                     (1,497) |
|                                                |                                                                                                                |                                                                                                                                      |                                                                                                                                                                            |   |   |
| CASH      FLOWS FROM FINANCING ACTIVITIES:          |                                                                                                                |                                                                                                                                      |                                                                                                                                                                            |
| Proceeds      from exercise of options              |                                                                                                                |                   476,578                       |                                                                                                                                                                            |                     11,360 |
| Payment      for purchase of treasury stock         |                                                                                                                |                 (118,159)                                 |                                                                                                                                                                            |                   (13,260) |
| Payments      pursuant to financing agreements      |              (3,540,949)                           |                                                                                                                                      |                              - |
| Dividends      paid                                 |                                                                                                                |                                                                                                                                      |                   (28,125)                                                            |   | (48,770) |
| Net      cash used in financing activities          |                                                                                                                |              (3,210,655)                                                 |                                                                                                                                                                            | (50,670) |
|                                                |                                                                                                                |                                                                                                                                      |                                                                                                                                                                            |   |   |
| (Continued)                                         |                                                                                                                |                                                                                                                                      |                                                                                                                                                                            |   |   |

----

|                                               |   |  Six      Months Ended June 30, |       |
|----------------------------------------------------|--------|--------------------------------------|------------|
|                                               |   |                                 |       |   | Restated |   |
|                                               |   | 2008                                 |       |   | 2007 |   |
|                                               |   |                                 |       |   |   |   |
| EFFECT      OF EXCHANGE RATE CHANGES ON CASH       |   |                                 | 9,994      |   |   |   | 3,602 |   |
|                                               |   |                                 |       |   |   |   |   |   |
| NET      DECREASE IN CASH                          |   |                                 | (6,650,991 | ) |   |   | (5,275,756 | ) |
|                                               |   |                                 |       |   |   |   |   |   |
| CASH,      BEGINNING OF PERIOD                     |   |                                 | 17,221,811 |   |   |   | 25,270,377 |   |
|                                               |   |                                 |       |   |   |   |   |   |
| CASH      END OF PERIOD                            |   | $                                    | 10,570,820 |   |   | $ | 19,994,621 |   |
|                                               |   |                                 |       |   |   |   |   |   |
| 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      |   |   | $ | 13,789 |   |
|                                               |   |                                 |       |   |   |   |   |   |
| SUPPLEMENTAL      INFORMATION                      |   |                                 |       |   |   |   |   |   |
|                                               |   |                                 |       |   |   |   |   |   |
| Cash      paid for interest expense                |   | $                                    | 1,686,813  |   |   | $ | 1,939,376 |   |
|                                               |   |                                 |       |   |   |   |   |   |

----

----

|                                              |   | Six      months ended |      |   | Six      months ended |   |
|---------------------------------------------------|--------|-----------------------|-----------|--------|-----------------------|--------|
|                                              |   | June      30,         |      |   | June      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* |   |                  | 308,369   |   |                  |   | 231,101 |   |
|   Related      to prior period sales    |   |                  | 650,000   |   |                  |   | 264,683 |   |
|                                              |   |                  | 958,369   |   |                  |   | 495,784 |   |
|                                              |   |                  |      |   |                  |   |   |   |
| Returns:                                          |   |                  |      |   |                  |   |   |   |
|   Related      to prior period sales    |   |                  | (976,261  | )      |                  |   | (746,977 | ) |
|                                              |   |                  |      |   |                  |   |   |   |
|                                              |   |                  |      |   |                  |   |   |   |
| Balance      at end of quarter                    |   | $                     | 1,905,877 |   |                  | $      | 1,989,042 |   |

|                 |   | June      30, |      |   | December      31, |   |
|----------------------|--------|---------------|-----------|--------|-------------------|--------|
|                 |   | 2008          |      |   | 2007              |   |
| Finished      goods  |   | $             | 2,529,235 |   |              | $      | 1,734,052 |   |
| Work      in Process |   |          | 79,526    |   |              |   | - |   |
| Raw      materials   |   |          | 1,114,220 |   |              |   | 1,313,077 |   |
|                 |   |          |      |   |              |   |   |   |
|                 |   | $             | 3,722,981 |   |              | $      | 3,047,129 |   |
|                 |   |          |      |   |              |   |   |   |

----

|                                   |   | June      30, |       |   | December      31, |   |
|----------------------------------------|--------|---------------|------------|--------|-------------------|--------|
|                                   |   | 2008          |       |   | 2007              |   |
| July      31, 2002 financing agreement |   | $             | -          |   |              | $      | 3,620,653 |   |
| March      5, 2003 financing agreement |   |          | 12,420,507 |   |              |   | 11,591,486 |   |
|                                   |   |          | 12,420,507 |   |              |   | 15,212,139 |   |
| Less:      current portion             |   |          | 165,888    |   |              |   | 3,786,538 |   |
|                                   |   | $             | 12,254,619 |   |              | $      | 11,425,601 |   |
|                                   |   |          |       |   |              |   |   |   |

----

|                              |   |     |       |   |            |   |
|-----------------------------------|--------|----------|------------|--------|-----------------|--------|
|                              |   | Net      |       |   | Long      Lived |   |
|                              |   | Revenues |       |   | Assets          |   |
|                              |   |     |       |   |            |   |
| As      of and for the six months |   |     |       |   |            |   |
| ended      June 30, 2008          |   |     |       |   |            |   |
| United      States                |   | $        | 11,724,452 |   |            | $      | 27,744,052 |   |
|                              |   |     |       |   |            |   |   |   |
| Switzerland                       |   |     | 6,015,129  |   |            |   | - |   |
| Other      European countries     |   |     | 592,968    |   |            |   | 871,893 |   |
| Total      International          |   |     | 6,608,097  |   |            |   | 871,893 |   |
| Total                             |   | $        | 18,332,549 |   |            | $      | 28,615,945 |   |
|                              |   |     |       |   |            |   |   |   |
| As      of and for the six months |   |     |       |   |            |   |   |   |
| ended      June 30, 2007          |   |     |       |   |            |   |   |   |
| United      States                |   | $        | 10,180,241 |   |            | $      | 33,028,690 |   |
|                              |   |     |       |   |            |   |   |   |
| Switzerland                       |   |     | 3,384,389  |   |            |   | - |   |
| Other      European countries     |   |     | 407,004    |   |            |   | 632,552 |   |
| Total      International          |   |     | 3,791,393  |   |            |   | 632,552 |   |
| Total                             |   | $        | 13,971,634 |   |            | $      | 33,661,242 |   |
|                              |   |     |       |   |            |   |   |   |

----

|                                                   |   |  Six      Months Ended |       |   |  Three      Months Ended |   |
|--------------------------------------------------------|--------|-----------------------------|------------|--------|-------------------------------|--------|
|                                                   |   | June      30,               |       |   | June      30,                 |   |
|                                                   |   |                        |       |   | Restated                      |   |   |   |   |   | Restated |   |
|                                                   |   | 2008                        |       |   | 2007                          |   |   | 2008 |   |   | 2007 |   |
|                                                   |   |                        |       |   |                          |   |   |   |   |   |   |   |
| Net      loss                                          |   | $                           | (8,574,967 | )      |                          | $      | (7,125,351 | ) |   | $ | (4,326,171 | ) |   | $ | (3,589,375 | ) |
| Less:      Preferred stock dividends                   |   |                        | (28,124    | )      |                          |   | (48,770 | ) |   |   | (14,062 | ) |   |   | (14,707 | ) |
|                                                   |   |                        |       |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Net      loss applicable to                            |   |                        |       |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Common      Stock                                      |   | $                           | (8,603,091 | )      |                          | $      | (7,174,121 | ) |   | $ | (4,340,233 | ) |   | $ | (3,604,082 | ) |
|                                                   |   |                        |       |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Basic      and diluted:                                |   |                        |       |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      average number of                        |   |                        |       |   |                          |   |   |   |   |   |   |   |   |   |   |   |
|     common      shares outstanding |   |                        | 52,083,106 |   |                          |   | 50,713,299 |   |   |   | 52,127,332 |   |   |   | 51,342,528 |   |
|                                                   |   |                        |       |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Basic      and diluted net loss per common share       |   | $                           | (0.17      | )      |                          | $      | (0.14 | ) |   | $ | (0.08 | ) |   | $ | (0.07 | ) |
|                                                   |   |                        |       |   |                          |   |   |   |   |   |   |   |   |   |   |   |

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|                       |   | Products      for Fiscal 2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|----------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 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 foreign markets         RepHresh®      Vaginal Gel sold to Lil’ Drug Store on a worldwide basis         Royalty and licensingrevenues |

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Results of Operations - Six Months Ended June 30,2008 versus Six Months Ended June 30, 2007 (Restated)

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|                      |   | Six      Months Ended |       |
|---------------------------|--------|-----------------------|------------|
|                      |   | June      30,         |       |
|                      |   |                  |       |   | Restated |   |
|                      |   | 2008                  |       |   | 2007 |   |
| Cash      flows:          |   |                  |       |   |   |   |
| Operating      activities |   | $                     | (3,302,521 | ) |   | $ | (5,227,192 | ) |
| Investing      activities |   |                  | (147,809   | ) |   |   | (1,497 | ) |
| Financing      activities |   |                  | (3,210,655 | ) |   |   | (50,670 | ) |

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|                         | 6      months ended June 30, 2008 | 6      months ended June 30, 2007 |
|------------------------------|-----------------------------------|-----------------------------------|
| Risk      free interest rate | 2.50%                             | 4.55%                             |
| Expected      term           | 4.75      years                   | 4.51      years                   |
| Dividend      yield          | 0.0                               | 0.0                               |
| Expected      volatility     | 84.29%                            | 85.68%                            |

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

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

| (1)   | Incorporated      by reference to the registrant’s definitive proxy statement relating to      the registrant’s 2007 annual meeting of stockholders filed with the      Securities and Exchange Commission on April 8,  2007. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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|  COLUMBIA LABORATORIES,      INC.    |   |
|----------------------------------------------------------|--------|
|  /s/ JAMES A.      MEER                   |   |
|  JAMES A. MEER,      Senior Vice President-         |   |
| Chief Financial      Officer and Treasurer               |   |

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