UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________ FORM 10-Q ______________ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
                     EXCHANGE ACT OF 1934. For the quarterly period ended June 30, 2010 Commission File Number 1-32302  ANTARES PHARMA, INC. A Delaware Corporation
                           
                           
                           
                           
                           
                           IRS Employer Identification No. 41-1350192250 Phillips Blvd, Suite 290Ewing, New Jersey 08618(609) 359-3020 Indicate by check mark whether the registrant (1) has filed all
                     reports required to be filed by Section 13 or 15(d) of the Securities
                     Exchange Act of 1934 during the preceding 12 months (or for such
                     shorter period that the Registrant was required to file such
                     reports), and (2) has been subject to such filing requirements for
                     the past 90 days. Yes x No o Indicate by check mark whether the registrant has submitted
                     electronically and posted on its corporate Web site, if any, every
                     Interactive Data File required to be submitted and posted pursuant to
                     Rule 405 of Regulation S-T (§232.405 of this chapter) during the
                     preceding 12 months (or for such shorter period that the registrant
                     was required to submit and post such files). Yes o No o Indicate by check mark whether the registrant is a large accelerated
                     filer, an accelerated filer, a non-accelerated filer, or a smaller
                     reporting company. See the definitions of "large accelerated filer,"
                     "accelerated filer" and "smaller reporting company" in Rule 12b-2 of
                     the Exchange Act. Large accelerated filer o
                           
                           
                           Accelerated filer o
                           
                           
                           Non-accelerated filer x
                           
                           
                           Smaller reporting company o(do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as
                     defined in Rule 12b-2 of the Exchange Act).
                      Yes o No x The number of shares outstanding of the registrant's Common Stock,
                     $.01 par value, as of August 11, 2010, was 83,547,968.


ANTARES PHARMA, INC. INDEX PAGEPART I.
                           
                           
                           
                           
                           
                           
                           
                           
                           FINANCIAL INFORMATIONItem 1.
                           
                           
                           
                           
                           
                           Financial Statements (Unaudited)Consolidated Balance Sheets, as of June 30, 2010 (Unaudited) and
                              December 31, 2009
                           
                           
                           3Consolidated Statements of Operations (Unaudited) for the three
                              months and six months ended June 30, 2010 and 2009
                           
                           
                           4Consolidated Statements of Cash Flows (Unaudited) for the six months
                              ended June 30, 2010 and 2009
                           
                           
                           5Notes to Consolidated Financial Statements
                           
                           
                           6Item 2.
                           
                           
                           
                           
                           
                           Management's Discussion and Analysis of Financial Condition and
                              Results of Operations
                           
                           
                           11Item 3.
                           
                           
                           
                           
                           
                           Quantitative and Qualitative Disclosures About Market Risk
                           
                           
                           16Item 4.
                           
                           
                           
                           
                           
                           Controls and Procedures
                           
                           
                           16PART II.
                           
                           
                           
                           
                           
                           
                           
                           
                           OTHER INFORMATIONItem 1A.
                           
                           
                           
                           
                           
                           Risk Factors
                           
                           
                           18Item 6.
                           
                           
                           
                           
                           
                           Exhibits
                           
                           
                           18SIGNATURES
                           
                           
                           19
 2


PART I - FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS. ANTARES PHARMA, INC.CONSOLIDATED BALANCE SHEETS June 30,2010
                           
                           
                           
                           
                           
                           December 31,2009(Unaudited)AssetsCurrent Assets:Cash and cash equivalents
                           
                           
                           
                           
                           $
                           11,442,740
                           
                           
                           
                           
                           $
                           13,559,088Accounts receivable
                           
                           
                           
                           
                           
                           649,268
                           
                           
                           
                           
                           
                           1,542,272Inventories
                           
                           
                           
                           
                           
                           391,241
                           
                           
                           
                           
                           
                           329,553Deferred costs
                           
                           
                           
                           
                           
                           644,919
                           
                           
                           
                           
                           
                           963,053Prepaid expenses and other current assets
                           
                           
                           
                           
                           
                           96,376
                           
                           
                           
                           
                           
                           155,255Total current assets
                           
                           
                           
                           
                           
                           13,224,544
                           
                           
                           
                           
                           
                           16,549,221Equipment, molds, furniture and fixtures, net
                           
                           
                           
                           
                           
                           310,771
                           
                           
                           
                           
                           
                           317,310Patent rights, net
                           
                           
                           
                           
                           
                           722,570
                           
                           
                           
                           
                           
                           742,399Goodwill
                           
                           
                           
                           
                           
                           1,095,355
                           
                           
                           
                           
                           
                           1,095,355Deferred costs
                           
                           
                           
                           
                           
                           408,250
                           
                           
                           
                           
                           
                           408,250Other assets
                           
                           
                           
                           
                           
                           30,687
                           
                           
                           
                           
                           
                           30,838Total Assets
                           
                           
                           
                           
                           $
                           15,792,177
                           
                           
                           
                           
                           $
                           19,143,373Liabilities and Stockholders' EquityCurrent Liabilities:Accounts payable
                           
                           
                           
                           
                           $
                           1,161,762
                           
                           
                           
                           
                           $
                           1,882,158Accrued expenses and other liabilities
                           
                           
                           
                           
                           
                           996,841
                           
                           
                           
                           
                           
                           1,048,619Deferred revenue
                           
                           
                           
                           
                           
                           3,644,066
                           
                           
                           
                           
                           
                           5,311,516Total current liabilities
                           
                           
                           
                           
                           
                           5,802,669
                           
                           
                           
                           
                           
                           8,242,293Deferred revenue - long term
                           
                           
                           
                           
                           
                           1,943,737
                           
                           
                           
                           
                           
                           2,050,550Total liabilities
                           
                           
                           
                           
                           
                           7,746,406
                           
                           
                           
                           
                           
                           10,292,843Stockholders' Equity:Preferred Stock: $0.01 par, authorized 3,000,000 shares, none outstanding
                           
                           
                           
                           
                           
                           -
                           
                           
                           
                           
                           
                           -Common Stock: $0.01 par; authorized 150,000,000 shares; 83,442,686
                              and 81,799,541 issued and outstanding at June 30, 2010 and December
                              31, 2009, respectively
                           
                           
                           
                           
                           
                           834,427
                           
                           
                           
                           
                           
                           817,995Additional paid-in capital
                           
                           
                           
                           
                           
                           141,869,327
                           
                           
                           
                           
                           
                           139,614,459Accumulated deficit
                           
                           
                           
                           
                           
                           (134,043,794
                           )
                           
                           
                           
                           
                           (130,882,597
                           )Accumulated other comprehensive loss
                           
                           
                           
                           
                           
                           (614,189
                           )
                           
                           
                           
                           
                           (699,327
                           )8,045,771
                           
                           
                           
                           
                           
                           8,850,530Total Liabilities and Stockholders' Equity
                           
                           
                           
                           
                           $
                           15,792,177
                           
                           
                           
                           
                           $
                           19,143,373   See accompanying notes to consolidated financial statements.
 3


ANTARES PHARMA, INC.CONSOLIDATED STATEMENTS OF OPERATIONS(UNAUDITED) For the Three Months Ended June 30,
                           
                           
                           
                           
                           
                           For the Six Months Ended June 30,2010
                           
                           
                           
                           
                           
                           2009
                           
                           
                           
                           
                           
                           2010
                           
                           
                           
                           
                           
                           2009Revenue:Product sales
                           
                           $
                           1,151,978
                           
                           
                           
                           
                           $
                           1,168,620
                           
                           
                           
                           
                           $
                           2,478,030
                           
                           
                           
                           
                           $
                           1,992,371Development revenue
                           
                           
                           497,195
                           
                           
                           
                           
                           
                           321,896
                           
                           
                           
                           
                           
                           1,302,442
                           
                           
                           
                           
                           
                           1,068,733Licensing revenue
                           
                           
                           1,043,845
                           
                           
                           
                           
                           
                           107,879
                           
                           
                           
                           
                           
                           1,879,918
                           
                           
                           
                           
                           
                           805,586Royalties
                           
                           
                           357,969
                           
                           
                           
                           
                           
                           111,171
                           
                           
                           
                           
                           
                           754,683
                           
                           
                           
                           
                           
                           207,946Total revenue
                           
                           
                           3,050,987
                           
                           
                           
                           
                           
                           1,709,566
                           
                           
                           
                           
                           
                           6,415,073
                           
                           
                           
                           
                           
                           4,074,636Cost of revenue:Cost of product sales
                           
                           
                           592,365
                           
                           
                           
                           
                           
                           523,931
                           
                           
                           
                           
                           
                           1,248,825
                           
                           
                           
                           
                           
                           968,047Cost of development revenue
                           
                           
                           403,596
                           
                           
                           
                           
                           
                           175,235
                           
                           
                           
                           
                           
                           1,062,115
                           
                           
                           
                           
                           
                           820,289Total cost of revenue
                           
                           
                           995,961
                           
                           
                           
                           
                           
                           699,166
                           
                           
                           
                           
                           
                           2,310,940
                           
                           
                           
                           
                           
                           1,788,336Gross profit
                           
                           
                           2,055,026
                           
                           
                           
                           
                           
                           1,010,400
                           
                           
                           
                           
                           
                           4,104,133
                           
                           
                           
                           
                           
                           2,286,300Operating expenses:Research and development
                           
                           
                           2,242,788
                           
                           
                           
                           
                           
                           1,745,309
                           
                           
                           
                           
                           
                           4,328,613
                           
                           
                           
                           
                           
                           3,952,068Sales, marketing and business development
                           
                           
                           241,278
                           
                           
                           
                           
                           
                           216,863
                           
                           
                           
                           
                           
                           571,799
                           
                           
                           
                           
                           
                           552,380General and administrative
                           
                           
                           1,121,957
                           
                           
                           
                           
                           
                           1,140,951
                           
                           
                           
                           
                           
                           2,339,589
                           
                           
                           
                           
                           
                           2,452,9653,606,023
                           
                           
                           
                           
                           
                           3,103,123
                           
                           
                           
                           
                           
                           7,240,001
                           
                           
                           
                           
                           
                           6,957,413Operating loss
                           
                           
                           (1,550,997
                           )
                           
                           
                           
                           
                           (2,092,723
                           )
                           
                           
                           
                           
                           (3,135,868
                           )
                           
                           
                           
                           
                           (4,671,113
                           )Other income (expense):Interest income
                           
                           
                           7,707
                           
                           
                           
                           
                           
                           6,385
                           
                           
                           
                           
                           
                           8,897
                           
                           
                           
                           
                           
                           25,022Interest expense
                           
                           
                           (1,182
                           )
                           
                           
                           
                           
                           (164,557
                           )
                           
                           
                           
                           
                           (2,478
                           )
                           
                           
                           
                           
                           (359,790
                           )Foreign exchange gains (losses)
                           
                           
                           (10,193
                           )
                           
                           
                           
                           
                           (21,219
                           )
                           
                           
                           
                           
                           (35,503
                           )
                           
                           
                           
                           
                           (28,171
                           )Other, net
                           
                           
                           2,411
                           
                           
                           
                           
                           
                           (12,299
                           )
                           
                           
                           
                           
                           3,755
                           
                           
                           
                           
                           
                           (25,716
                           )(1,257
                           )
                           
                           
                           
                           
                           (191,690
                           )
                           
                           
                           
                           
                           (25,329
                           )
                           
                           
                           
                           
                           (388,655
                           )Net loss
                           
                           $
                           (1,552,254
                           )
                           
                           
                           
                           $
                           (2,284,413
                           )
                           
                           
                           
                           $
                           (3,161,197
                           )
                           
                           
                           
                           $
                           (5,059,768
                           )Basic and diluted net loss per common share
                           
                           $
                           (0.02
                           )
                           
                           
                           
                           $
                           (0.03
                           )
                           
                           
                           
                           $
                           (0.04
                           )
                           
                           
                           
                           $
                           (0.07
                           )Basic and diluted weighted average commonshares outstanding
                           
                           
                           82,912,179
                           
                           
                           
                           
                           
                           68,101,137
                           
                           
                           
                           
                           
                           82,592,824
                           
                           
                           
                           
                           
                           68,075,544    See accompanying notes to consolidated financial statements.
 4


ANTARES PHARMA, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS(UNAUDITED)  For the Six Months Ended June 30,2010
                           
                           
                           
                           
                           
                           2009Cash flows from operating activities:Net loss
                           
                           $
                           (3,161,197
                           )
                           
                           
                           
                           $
                           (5,059,768
                           )Adjustments to reconcile net loss to net cash used inoperating activities:Depreciation and amortization
                           
                           
                           88,708
                           
                           
                           
                           
                           
                           114,364Gain on sale of equipment, molds, furniture and fixtures
                           
                           
                           (14,980
                           )
                           
                           
                           
                           
                           -Stock-based compensation expense
                           
                           
                           565,705
                           
                           
                           
                           
                           
                           518,867Amortization of debt discount and issuance costs
                           
                           
                           -
                           
                           
                           
                           
                           
                           96,521Changes in operating assets and liabilities:Accounts receivable
                           
                           
                           801,466
                           
                           
                           
                           
                           
                           450,566Inventories
                           
                           
                           (61,688
                           )
                           
                           
                           
                           
                           (124,974
                           )Prepaid expenses and other current assets
                           
                           
                           55,687
                           
                           
                           
                           
                           
                           27,359Deferred costs
                           
                           
                           324,607
                           
                           
                           
                           
                           
                           449,568Accounts payable
                           
                           
                           (702,299
                           )
                           
                           
                           
                           
                           135,355Accrued expenses and other current liabilities
                           
                           
                           (28,422
                           )
                           
                           
                           
                           
                           (11,449
                           )Deferred revenue
                           
                           
                           (1,689,494
                           )
                           
                           
                           
                           
                           (1,350,943
                           )Net cash used in operating activities
                           
                           
                           (3,821,907
                           )
                           
                           
                           
                           
                           (4,754,534
                           )Cash flows from investing activities:Purchases of equipment, molds, furniture and fixtures
                           
                           
                           (40,434
                           )
                           
                           
                           
                           
                           (1,081
                           )Additions to patent rights
                           
                           
                           (47,136
                           )
                           
                           
                           
                           
                           (85,920
                           )Proceeds from sales of equipment, molds, furniture and fixtures
                           
                           
                           14,980
                           
                           
                           
                           
                           
                           -Net cash used in investing activities
                           
                           
                           (72,590
                           )
                           
                           
                           
                           
                           (87,001
                           )Cash flows from financing activities:Proceeds from exercise of stock options and warrants
                           
                           
                           1,692,826
                           
                           
                           
                           
                           
                           53,667Principal payments on long-term debt
                           
                           
                           -
                           
                           
                           
                           
                           
                           (1,260,584
                           )Net cash provided by (used in) financing activities
                           
                           
                           1,692,826
                           
                           
                           
                           
                           
                           (1,206,917
                           )Effect of exchange rate changes on cash and cash equivalents
                           
                           
                           85,323
                           
                           
                           
                           
                           
                           (10,477
                           )Net decrease in cash and cash equivalents
                           
                           
                           (2,116,348
                           )
                           
                           
                           
                           
                           (6,058,929
                           )Cash and cash equivalents:Beginning of period
                           
                           
                           13,559,088
                           
                           
                           
                           
                           
                           13,096,298End of period
                           
                           $
                           11,442,740
                           
                           
                           
                           
                           $
                           7,037,369 See accompanying notes to consolidated financial statements
 5


ANTARES PHARMA, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED) 1. Description of Business Antares Pharma, Inc. (the "Company" or "Antares") is an emerging
                     pharma company that focuses on self-injection pharmaceutical products
                     and technologies and topical gel-based products. The Company's
                     subcutaneous and intramuscular injection technology platforms include
                     Vibex disposable pressure-assisted auto injectors, Vision reusable
                     needle-free injectors, and disposable multi-use pen injectors.
                     Pharmaceutical and biotechnology companies are viewed as the
                     Company's primary customers. In the injector area, the Company has licensed its reusable
                     needle-free injection device for use with human growth hormone
                     ("hGH") to Teva Pharmaceutical Industries, Ltd. ("Teva"), Ferring
                     Pharmaceuticals BV ("Ferring") and JCR Pharmaceuticals Co., Ltd.
                     ("JCR").  In August 2009, the Company announced that Teva launched
                     its Tjet® injector system, which uses the Company's needle-free
                     device to administer Teva's Tev-Tropin® brand hGH. The Company has
                     also licensed both disposable auto and pen injection devices to Teva
                     for use in certain fields and territories. In 2009, the Company
                     received a payment of $4,076,375 from Teva for tooling and for an
                     advance for the design, development and purchase of additional
                     tooling and automation equipment, all of which is related to a fixed,
                     single-dose, disposable injector product containing epinephrine using
                     the Company's Vibex auto injector platform. In addition, the Company
                     continues to support existing customers of its reusable needle-free
                     devices for the home or alternate site administration of insulin in
                     the U.S. market through distributors. In the gel-based area, the Company recently completed a pivotal Phase
                     3 trial for its lead product candidate, Anturol®, an oxybutynin ATD
                     gel for the treatment of overactive bladder ("OAB"), for which the
                     Company expects to file a New Drug Application ("NDA") with the U.S.
                     Food and Drug Administration ("FDA") in 2010. The Company also has a
                     partnership with BioSante Pharmaceuticals, Inc. ("BioSante") that
                     includes LibiGel® (transdermal testosterone gel) in Phase 3 clinical
                     development for the treatment of female sexual dysfunction ("FSD"),
                     and Elestrin® (estradiol gel) currently marketed in the U.S. for the
                     treatment of moderate-to-severe vasomotor symptoms associated with
                     menopause. The Company has operating facilities in the U.S. and Switzerland. The
                     U.S. operation manufactures and markets the Company's reusable
                     needle-free injection devices and related disposables, and develops
                     its disposable pressure-assisted auto injector and pen injector
                     systems. These operations, including all development and some U.S.
                     administrative activities, are located in Minneapolis, Minnesota. The
                     Company's Pharma division is located both in the U.S. and in Muttenz,
                     Switzerland, where pharmaceutical products are developed utilizing
                     the Company's transdermal systems. The Company's corporate offices
                     are located in Ewing, New Jersey. 2. Basis of Presentation The accompanying unaudited consolidated financial statements have
                     been prepared in accordance with generally accepted accounting
                     principles in the United State of America for interim financial
                     information and with the instructions to Form 10-Q and Article 10 of
                     the Securities and Exchange Commission's Regulation S-X. Accordingly,
                     they do not include all of the information and footnotes required by
                     accounting principles generally accepted in the United States of
                     America for complete financial statements. In the opinion of
                     management, all adjustments (consisting of normal recurring accruals)
                     considered necessary for a fair presentation have been included. The
                     accompanying consolidated financial statements and notes should be
                     read in conjunction with the Company's Annual Report on Form 10-K for
                     the year ended December 31, 2009. Operating results for the three and
                     six-month periods ended June 30, 2010 are not necessarily indicative
                     of the results that may be expected for the year ending December 31,
                     2010. 3. Stockholders' Equity Common Stock Warrant and stock option exercises in the first six months of 2010
                     and 2009 resulted in proceeds of $1,692,826 and $53,667,
                     respectively, and in the issuance of 1,531,101 and 85,333 shares of
                     common stock, respectively. Stock Options and Warrants The Company records compensation expense associated with share based
                     awards granted to employees at the fair value of the award on the
                     date of grant. The expense is recognized over the period during which
                     an employee is required to provide services in exchange for the award.
 6


The Company's 2008 Equity Compensation Plan (the "Plan") allows for
                     the grants of options, restricted stock, stock units, stock
                     appreciation rights and/or performance awards to officers, directors,
                     consultants and employees. Under the Plan, the maximum number of
                     shares of stock that may be granted to any one participant during a
                     calendar year is 1,000,000 shares. Options to purchase shares of
                     common stock are granted at exercise prices not less than 100% of the
                     fair market value on the dates of grant. The term of the options
                     range from three to eleven years and they vest in varying periods. In
                     May 2010, the shareholders approved an amendment to the Plan to
                     increase the maximum number of shares authorized for issuance by
                     1,500,000 to 11,500,000 from 10,000,000. As of June 30, 2010, the
                     Plan had 2,024,022 shares available for grant. The number of shares
                     available for grant does not take into consideration potential stock
                     awards that could result in the issuance of shares of common stock if
                     certain performance conditions are met, as discussed under "Stock
                     Awards" below. Stock option exercises are satisfied through the
                     issuance of new shares. A summary of stock option activity under the Plan as of June 30,
                     2010, and the changes during the six-month period then ended is as
                     follows: Number of Shares
                           
                           
                           
                           
                           
                           WeightedAverageExercise Price ($)
                           
                           
                           
                           
                           
                           Weighted AverageRemainingContractualTerm (Years)
                           
                           
                           
                           
                           
                           AggregateIntrinsicValue ($)Outstanding at December 31, 2009
                           
                           
                           
                           
                           
                           8,339,684
                           
                           
                           
                           
                           
                           1.13Granted
                           
                           
                           
                           
                           
                           552,487
                           
                           
                           
                           
                           
                           1.49Exercised
                           
                           
                           
                           
                           
                           (1,254,851
                           )
                           
                           
                           
                           
                           1.02Cancelled
                           
                           
                           
                           
                           
                           (252,100
                           )
                           
                           
                           
                           
                           2.07Outstanding at June 30, 2010
                           
                           
                           
                           
                           
                           7,385,220
                           
                           
                           
                           
                           
                           1.14
                           
                           
                           
                           
                           
                           7.3
                           
                           
                           
                           
                           
                           5,079,000Exercisable at June 30, 2010
                           
                           
                           
                           
                           
                           5,253,537
                           
                           
                           
                           
                           
                           1.22
                           
                           
                           
                           
                           
                           6.6
                           
                           
                           
                           
                           
                           3,327,000 During the first six months of 2010, the Company granted options to
                     purchase a total of 552,487 shares of its common stock at exercise
                     prices ranging from $1.30 to $1.60. During the first six months of
                     2009, the Company granted options to purchase a total of 406,927
                     shares of its common stock at exercise prices ranging from $0.47 to
                     $0.53. All options were granted at exercise prices which equaled the
                     fair value of the Company's common stock on the dates of the grants. Total recognized compensation expense for stock options was
                     approximately $446,100 and $466,000 for the first six months of 2010
                     and 2009, respectively. As of June 30, 2010, there was approximately
                     $1,011,100 of total unrecognized compensation cost related to
                     nonvested outstanding stock options that is expected to be recognized
                     over a weighted average period of approximately 1.6 years. The per share weighted average fair value of options granted during
                     the first six months of 2010 and 2009 were estimated as $0.79 and
                     $0.36, respectively, on the date of grant using the Black-Scholes
                     option pricing model based on the assumptions noted in the table
                     below. Expected volatilities are based on the historical volatility
                     of the Company's stock price. The weighted average expected life is
                     based on both historical and anticipated employee behavior. June 30,2010
                           
                           
                           
                           
                           
                           2009Risk-free interest rate
                           
                           
                           2.2
                           %
                           
                           
                           
                           
                           1.9
                           %Annualized volatility
                           
                           
                           61.0
                           %
                           
                           
                           
                           
                           88.0
                           %Weighted average expected life, in years
                           
                           
                           5.0
                           
                           
                           
                           
                           
                           5.0Expected dividend yield
                           
                           
                           0.0
                           %
                           
                           
                           
                           
                           0.0
                           % Warrants to purchase a total of 18,019,159 shares of common stock
                     were outstanding at June 30, 2010. The weighted average exercise
                     price of the warrants was $1.56. The weighted average exercise price of the stock options and warrants
                     outstanding at June 30, 2010 and 2009 was $1.44 and $1.57,
                     respectively. Stock Awards The employment agreements with the Chief Executive Officer, Chief
                     Financial Officer and other members of executive management include
                     stock-based incentives under which the executives could be awarded up
                     to approximately 1,530,000 shares of common stock upon the occurrence
                     of various triggering events. Of these shares, 45,454 were awarded in
                     the first half of
 7


2010 and 180,681 were awarded prior to 2010. A total of approximately
                     $18,200 of compensation expense was recorded in the first half of
                     2010 in connection with awards considered probable of achievement. A total of 435,768 shares of common stock have been granted as stock
                     awards to members of management, of which 170,768 were granted in the
                     first half of 2010. The majority of the stock awards vest over a
                     three-year period, although 25,000 shares granted in the first
                     quarter of 2010 vested immediately. A total of 239,104 of the shares
                     granted are unvested as of June 30, 2010. Expense is recognized on a
                     straight-line basis over the vesting period and is based on the fair
                     value of the stock on the grant date. The fair value of each stock
                     award is determined based on the number of shares granted and the
                     market price of the Company's common stock on the date of grant.
                     Expense recognized in connection with these awards was approximately
                     $85,000 and $25,000 in the first six months of 2010 and 2009,
                     respectively. The weighted average fair value of the shares granted
                     in 2010 was $1.30 per share. 4. Net Loss Per Share Basic loss per common share is computed by dividing net loss
                     applicable to common stockholders by the weighted-average number of
                     common shares outstanding for the period. Diluted loss per common
                     share reflects the potential dilution from the exercise or conversion
                     of securities into common stock. Potentially dilutive stock options
                     and warrants excluded from dilutive loss per share because of their
                     effect was anti-dilutive totaled 25,404,379 and 20,865,477 at June
                     30, 2010 and 2009, respectively. The table below discloses the basic
                     and diluted loss per common share.  Three Months EndedJune 30,
                           
                           
                           
                           
                           
                           Six Months EndedJune 30,2010
                           
                           
                           
                           
                           
                           2009
                           
                           
                           
                           
                           
                           2010
                           
                           
                           
                           
                           
                           2009Net loss applicable to common shares
                           
                           
                           
                           
                           $
                           (1,552,254
                           )
                           
                           
                           
                           $
                           (2,284,413
                           )
                           
                           
                           
                           $
                           (3,161,197
                           )
                           
                           
                           
                           $
                           (5,059,768
                           )Basic and diluted weighted average common shares outstanding
                           
                           
                           
                           
                           
                           82,912,179
                           
                           
                           
                           
                           
                           68,101,137
                           
                           
                           
                           
                           
                           82,592,824
                           
                           
                           
                           
                           
                           68,075,544Basic and diluted net loss percommon share
                           
                           
                           
                           
                           $
                           (0.02
                           )
                           
                           
                           
                           $
                           (0.03
                           )
                           
                           
                           
                           $
                           (0.04
                           )
                           
                           
                           
                           $
                           (0.07
                           ) 5. Industry Segment and Operations by Geographic Areas The Company has one operating segment, drug delivery, which includes
                     the development of drug delivery transdermal products and drug
                     delivery injection devices and supplies. The geographic distributions of the Company's identifiable assets and
                     revenues are summarized in the following tables: The Company has assets located in two countries as follows:  June 30, 2010
                           
                           
                           
                           
                           
                           December 31,2009United States of America
                           
                           
                           
                           
                           $
                           15,334,350
                           
                           
                           
                           
                           $
                           17,384,011Switzerland
                           
                           
                           
                           
                           
                           457,827
                           
                           
                           
                           
                           
                           1,759,362$
                           15,792,177
                           
                           
                           
                           
                           $
                           19,143,373 Revenues by customer location are summarized as follows:  Three Months EndedJune 30,
                           
                           
                           
                           
                           
                           Six Months EndedJune 30,2010
                           
                           
                           
                           
                           
                           2009
                           
                           
                           
                           
                           
                           2010
                           
                           
                           
                           
                           
                           2009United States of America
                           
                           $
                           1,546,161
                           
                           
                           
                           
                           $
                           933,979
                           
                           
                           
                           
                           $
                           3,246,336
                           
                           
                           
                           
                           $
                           2,057,400Europe
                           
                           
                           1,408,261
                           
                           
                           
                           
                           
                           773,203
                           
                           
                           
                           
                           
                           2,955,195
                           
                           
                           
                           
                           
                           1,955,938Other
                           
                           
                           96,565
                           
                           
                           
                           
                           
                           2,384
                           
                           
                           
                           
                           
                           213,542
                           
                           
                           
                           
                           
                           61,298$
                           3,050,987
                           
                           
                           
                           
                           $
                           1,709,566
                           
                           
                           
                           
                           $
                           6,415,073
                           
                           
                           
                           
                           $
                           4,074,636
 8


Significant customers comprising 10% or more of total revenue were as follows:  Three Months EndedJune 30,
                           
                           
                           
                           
                           
                           Six Months EndedJune 30,2010
                           
                           
                           
                           
                           
                           2009
                           
                           
                           2010
                           
                           
                           
                           
                           
                           2009Ferring
                           
                           $
                           1,389,163
                           
                           
                           
                           
                           $
                           752,932
                           
                           
                           
                           
                           $
                           2,916,101
                           
                           
                           
                           
                           $
                           1,577,774Teva
                           
                           
                           1,335,267
                           
                           
                           
                           
                           
                           655,416
                           
                           
                           
                           
                           
                           2,663,305
                           
                           
                           
                           
                           
                           1,247,732Population Council
                           
                           
                           84,360
                           
                           
                           
                           
                           
                           41,448
                           
                           
                           
                           
                           
                           84,360
                           
                           
                           
                           
                           
                           434,690 6. Comprehensive Loss  Three Months EndedJune 30,
                           
                           
                           
                           
                           
                           Six Months EndedJune 30,2010
                           
                           
                           
                           
                           
                           2009
                           
                           
                           
                           
                           
                           2010
                           
                           
                           
                           
                           
                           2009Net loss
                           
                           $
                           (1,552,254
                           )
                           
                           
                           
                           $
                           (2,284,413
                           )
                           
                           
                           
                           $
                           (3,161,197
                           )
                           
                           
                           
                           $
                           (5,059,768
                           )Change in cumulativetranslation adjustment
                           
                           
                           67,095
                           
                           
                           
                           
                           
                           (8,608
                           )
                           
                           
                           
                           
                           85,138
                           
                           
                           
                           
                           
                           65,115Comprehensive loss
                           
                           $
                           (1,485,159
                           )
                           
                           
                           
                           $
                           (2,293,021
                           )
                           
                           
                           
                           $
                           (3,076,059
                           )
                           
                           
                           
                           $
                           (4,994,653
                           ) 7. Revenue Recognition Change In the third quarter of 2009, the Company elected early adoption of
                     Financial Accounting Standards Board ("FASB") Accounting Standards
                     Update ("ASU") 2009-13, "Revenue Arrangements with Multiple
                     Deliverables" ("ASU 2009-13"). ASU 2009-13, which amended FASB ASC
                     605-25, "Multiple-Element Arrangements," is effective for
                     arrangements entered into or materially modified in fiscal years
                     beginning on or after June 15, 2010, but allows for early adoption.
                     ASU 2009-13 requires a vendor to allocate revenue to each unit of
                     accounting in arrangements involving multiple deliverables. It
                     changes the level of evidence of standalone selling price required to
                     separate deliverables by allowing a vendor to make its best estimate
                     of the standalone selling price of deliverables when vendor specific
                     objective evidence or third party evidence of selling price is not
                     available. As a result of adoption of ASU 2009-13, deferred revenues
                     and deferred costs associated with one License, Development and
                     Supply Agreement with Teva will be recognized as revenues and
                     expenses earlier than would otherwise have occurred. Adoption of ASU
                     2009-13 had no impact on the accounting for any of the Company's
                     other revenue arrangements containing multiple deliverables. Revenues
                     and expenses generated in connection with future multiple element
                     arrangements will likely often be recognized over shorter periods
                     than would have occurred prior to adoption of ASU 2009-13. The Company elected to adopt ASU 2009-13 on a prospective basis, with
                     retrospective application to January 1, 2009. Because ASU 2009-13 was
                     adopted in the third quarter of 2009, the amounts reported in the
                     first and second quarters of 2009 are required to be adjusted and
                     reported as if adoption occurred on January 1, 2009. The tables below reconcile the amounts for the three months and six
                     months ended June 30, 2009 as previously reported to the amounts as
                     reported in the consolidated statement of operations after applying
                     adjustments reflecting adoption of ASU 2009-13 on a prospective basis
                     with retrospective application to January 1, 2009. Three Months Ended June 30, 2009As PreviouslyReported
                           
                           
                           
                           
                           
                           AdoptionAdjustments
                           
                           
                           
                           
                           
                           As ReportedAfter AdoptionDevelopment revenue
                           
                           $
                           299,674
                           
                           
                           
                           
                           $
                           22,222
                           
                           
                           
                           
                           $
                           321,896Licensing revenue
                           
                           
                           82,379
                           
                           
                           
                           
                           
                           25,500
                           
                           
                           
                           
                           
                           107,879Total revenue
                           
                           
                           1,661,844
                           
                           
                           
                           
                           
                           47,722
                           
                           
                           
                           
                           
                           1,709,566Cost of development and licensing revenue
                           
                           
                           96,711
                           
                           
                           
                           
                           
                           78,524
                           
                           
                           
                           
                           
                           175,235Total cost of revenue
                           
                           
                           620,642
                           
                           
                           
                           
                           
                           78,524
                           
                           
                           
                           
                           
                           699,166Gross profit
                           
                           
                           1,041,202
                           
                           
                           
                           
                           
                           (30,802
                           )
                           
                           
                           
                           
                           1,010,400Operating loss
                           
                           
                           (2,061,921
                           )
                           
                           
                           
                           
                           (30,802
                           )
                           
                           
                           
                           
                           (2,092,723
                           )Net loss
                           
                           
                           (2,253,611
                           )
                           
                           
                           
                           
                           (30,802
                           )
                           
                           
                           
                           
                           (2,284,413
                           )Basic and diluted net loss per common share
                           
                           $
                           (0.03
                           )
                           
                           
                           
                           
                           
                           
                           
                           
                           
                           $
                           (0.03
                           )
 9


Six Months Ended June 30, 2009As PreviouslyReported
                           
                           
                           
                           
                           
                           AdoptionAdjustments
                           
                           
                           
                           
                           
                           As ReportedAfter AdoptionDevelopment revenue
                           
                           $
                           979,844
                           
                           
                           
                           
                           $
                           88,889
                           
                           
                           
                           
                           $
                           1,068,733Licensing revenue
                           
                           
                           508,086
                           
                           
                           
                           
                           
                           297,500
                           
                           
                           
                           
                           
                           805,586Total revenue
                           
                           
                           3,688,247
                           
                           
                           
                           
                           
                           386,389
                           
                           
                           
                           
                           
                           4,074,636Cost of development and licensing revenue
                           
                           
                           364,450
                           
                           
                           
                           
                           
                           455,839
                           
                           
                           
                           
                           
                           820,289Total cost of revenue
                           
                           
                           1,332,497
                           
                           
                           
                           
                           
                           455,839
                           
                           
                           
                           
                           
                           1,788,336Gross profit
                           
                           
                           2,355,750
                           
                           
                           
                           
                           
                           (69,450
                           )
                           
                           
                           
                           
                           2,286,300Operating loss
                           
                           
                           (4,601,663
                           )
                           
                           
                           
                           
                           (69,450
                           )
                           
                           
                           
                           
                           (4,671,113
                           )Net loss
                           
                           
                           (4,990,318
                           )
                           
                           
                           
                           
                           (69,450
                           )
                           
                           
                           
                           
                           (5,059,768
                           )Basic and diluted net loss per common share
                           
                           $
                           (0.07
                           )
                           
                           
                           
                           
                           
                           
                           
                           
                           
                           $
                           (0.07
                           ) 8. New Accounting Pronouncements In April 2010, the Financial Accounting Standards Board (FASB) issued
                     Accounting Standards Update (ASU) 2010-17 (ASU 2010-17), Revenue
                     RecognitionMilestone Method (Topic 605), which provides guidance on
                     defining a milestone and determining when it may be appropriate to
                     apply the milestone method of revenue recognition for research or
                     development transactions. Research or development arrangements
                     frequently include payment provisions whereby a portion or all of the
                     consideration is contingent upon milestone events such as successful
                     completion of phases in a study or achieving a specific result from
                     the research or development efforts. The amendments in this ASU
                     provide guidance on the criteria that should be met for determining
                     whether the
                     milestone method of revenue recognition is appropriate. ASU 2010-17 is
                     effective for fiscal years and interim periods within those years
                     beginning on or after June 15, 2010, with early adoption permitted.
                     This ASU is effective for the Company on January 1, 2011. The Company
                     is currently evaluating the impact, if any, ASU 2010-17 will have on
                     the Company's consolidated financial statements.
 10


Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                        AND RESULTS OF OPERATIONS. Forward-Looking Statements Management's discussion and analysis of the significant changes in
                     the consolidated results of operations, financial condition and cash
                     flows of the Company is set forth below. Certain statements in this
                     report may be considered to be "forward-looking statements" as that
                     term is defined in the U.S. Private Securities Litigation Reform Act
                     of 1995, such as statements that include the words "expect,"
                     "estimate," "project," "anticipate," "should," "intend,"
                     "probability," "risk," "target," "objective" and other words and
                     terms of similar meaning in connection with any discussion of, among
                     other things, future operating or financial performance, strategic
                     initiatives and business strategies, regulatory or competitive
                     environments, our intellectual property and product development. In
                     particular, these forward-looking statements include, among others,
                     statements about: the impact of new accounting pronouncements; our expectations regarding product development, manufacturing and
                        partnering of Anturol®; our expectations regarding continued product development with Teva; our plans regarding potential manufacturing and marketing partners; our future cash flow; our expectations regarding a net loss for the year ending December 31, 2010; and our ability to raise additional financing, reduce expenses or
                        generate funds in light of our current and projected level of
                        operations and general economic conditions. The words "may," "will," "expect," "intend," "anticipate,"
                     "estimate," "believe," "continue," and similar expressions may
                     identify forward-looking statements, but the absence of these words
                     does not necessarily mean that a statement is not forward-looking.
                     Forward-looking statements involve known and unknown risks,
                     uncertainties and achievements, and other factors that may cause our
                     or our industry's actual results, levels of activity, performance, or
                     achievements to be materially different from the information
                     expressed or implied by these forward-looking statements. While we
                     believe that we have a reasonable basis for each forward-looking
                     statement contained in this report, we caution you that these
                     statements are based on a combination of facts and factors currently
                     known by us and projections of the future about which we cannot be
                     certain. Many factors may affect our ability to achieve our
                     objectives, including: our inability to compete successfully against new and existing
                        competitors or to leverage our marketing capabilities and our
                        research and development capabilities; our ability to partner Anturol®; delays in product introduction and marketing or interruptions in supply; a decrease in business from our major customers and partners; adverse economic and political conditions; our inability to obtain additional financing, reduce expenses or
                        generate funds when necessary; our inability to attract and retain key personnel; and our inability to effectively market our services or obtain and
                        maintain arrangements with our customers, partners and manufacturers. In addition, you should refer to the "Risk Factors" section of our
                     Annual Report on Form 10-K for the year ended December 31, 2009 for a
                     discussion of other factors that may cause our actual results to
                     differ materially from those described by our forward-looking
                     statements. As a result of these factors, we cannot assure you that
                     the forward-looking statements contained in this report will prove to
                     be accurate and, if our forward-looking statements prove to be
                     inaccurate, the inaccuracy may be material. We encourage readers of this report to understand forward-looking
                     statements to be strategic objectives rather than absolute targets of
                     future performance. Forward-looking statements speak only as of the
                     date they are made. We do not intend to update publicly any
                     forward-looking statements to reflect circumstances or events that
                     occur after the date the forward-looking statements are made or to
                     reflect the occurrence of unanticipated events except as required by
                     law. In light of the significant uncertainties in these
                     forward-looking statements, you should not regard these statements as
                     a representation or warranty by us or any other person that we will
                     achieve our objectives and plans in any specified time frame, if
                     at all.
 11


The following discussion and analysis, the purpose of which is to
                     provide investors and others with information that we believe to be
                     necessary for an understanding of our financial condition, changes in
                     financial condition and results of operations, should be read in
                     conjunction with the financial statements, notes and other
                     information contained in this report. Overview Antares Pharma, Inc. is an emerging pharma company that focuses on
                     self-injection pharmaceutical products and technologies and topical
                     gel-based products.  Our subcutaneous and intramuscular injection
                     technology platforms include Vibex disposable pressure-assisted auto
                     injectors, Vision reusable needle-free injectors and disposable
                     multi-use pen injectors. We currently view pharmaceutical and
                     biotechnology companies as our primary customers. In the injector area, we have licensed our reusable needle-free
                     injection device for use with hGH to Teva, Ferring and JCR.  In
                     August 2009, we announced that Teva launched its Tjet® injector
                     system, which uses our needle-free device to administer Teva's
                     Tev-Tropin® brand hGH. We have also licensed both disposable auto and
                     pen injection devices to Teva for use in certain fields and
                     territories. In 2009, we received a payment of $4,076,375 from Teva
                     for tooling and for an advance for the design, development and
                     purchase of additional tooling and automation equipment, all of which
                     is related to a fixed, single-dose, disposable injector product
                     containing epinephrine using our Vibex auto injector platform. In
                     addition, we continue to support existing customers of our reusable
                     needle-free devices for the home or alternate site administration of
                     insulin in the U.S. market through distributors. In the gel-based area, we recently completed a pivotal Phase 3 trial
                     for our lead product candidate, Anturol®, an oxybutynin ATD gel for
                     the treatment of OAB, for which we expect to file an NDA in 2010.
                     Spending on this program in the first half of 2010 was approximately
                     $2,600,000, and we expect spending in 2010 to be approximately
                     $5,000,000. We also have a partnership with BioSante that includes
                     LibiGel® (transdermal testosterone gel) in Phase 3 clinical
                     development for the treatment of FSD, and Elestrin® (estradiol gel)
                     currently marketed in the U.S for the treatment of moderate-to-severe
                     vasomotor symptoms associated with menopause. We have operating facilities in the U.S. and Switzerland. Our U.S.
                     operation manufactures and markets our reusable needle-free injection
                     devices and related disposables and develops our disposable
                     pressure-assisted auto injector and pen injector systems. These
                     operations, including all development and some U.S. administrative
                     activities, are located in Minneapolis, Minnesota. Our Pharma
                     division is located both in the U.S. and in Muttenz, Switzerland,
                     where pharmaceutical products are developed utilizing our transdermal
                     systems. Our corporate offices are located in Ewing, New Jersey. We incurred a net loss of $3,161,197 for the six-month period ended
                     June 30, 2010 and we expect to report a net loss for the year ending
                     December 31, 2010. We have not historically generated sufficient
                     revenue to provide the cash needed to support our operations and have
                     continued to operate primarily by raising capital and incurring debt.
                     In order to better position ourselves to take advantage of potential
                     growth opportunities and to fund future operations, during 2009, we
                     raised additional capital and took steps to reduce our monthly cash
                     obligations. We believe that the combination of our current cash and
                     cash equivalents balance, our recent reductions in our monthly cash
                     outflows, our projected product sales, product development revenue,
                     license revenues, milestone payments and royalties will provide us
                     with sufficient funds to support operations for at least the next
                     12 months. Results of Operations Three and Six Months Ended June 30, 2010 and 2009 Revenues Total revenues for the three and six months ended June 30, 2010 were
                     $3,050,987 and $6,415,073, compared to revenues for the same
                     prior-year periods of $1,709,566 and $4,074,636. Product revenue was
                     $1,151,978 and $2,478,030 in the three and six months ended June 30,
                     2010, respectively, compared to $1,168,620 and $1,992,371 in the
                     three and six months ended June 30, 2009, respectively. The slight
                     decrease in the quarter was due to a decrease in sales to Teva which
                     was offset by an increase in sales to Ferring. The Teva sales
                     decrease was due to a higher level of sales in the second quarter of
                     2009 than in 2010 due to initial sales of needle-free injection
                     devices and disposable components to Teva in anticipation of Teva's
                     launch of our Tjet needle-free device with their hGH Tev-Tropin®,
                     which occurred in August of 2009. The increase in product revenue for
                     the six-month period was due primarily to an increase in sales to
                     Ferring. Development revenue increased in the three and six-month
                     periods to $497,195 and $1,302,442, respectively, in 2010 compared to
                     $321,896 and $1,068,733 in the same periods of the prior year. The
                     increases were primarily due to development work related to our auto
                     injector technology. Licensing revenue also increased in the three
                     and six-month periods to $1,043,845 and $1,879,918, respectively, in
                     2010 from $107,879
 12


and $805,586, respectively, in 2009. The increases were primarily due
                     to recognition of revenue deferred in 2009 under an Exclusive License
                     Agreement with Ferring, along with milestone payments received from
                     Teva in the second quarter of 2010 and BioSante in the first quarter
                     of 2010. Royalty revenue increased in the three and six-month periods
                     to $357,969 and $754,683, respectively, in 2010 from $111,171 and
                     $207,946 in the same prior-year periods, primarily due to royalties
                     received from Teva in connection with sales of their hGH Tev-Tropin®. Cost of Revenues and Gross Margins The cost of product sales are related to our reusable needle free
                     injector devices and disposable components. For the three and
                     six-month periods ended June 30, 2010, cost of product sales was
                     $592,365 and $1,248,825, respectively, compared to $523,931 and
                     $968,047 for the same periods of the prior year. Product gross
                     margins were 49% and 55% in three-month periods ended June 30, 2010
                     and 2009, respectively, and were 50% and 51% for the six-month
                     periods ended June 30, 2010 and 2009, respectively. The gross margin
                     decrease in the quarter was due mainly to a difference in the mix of
                     products sold. The cost of development revenue consists primarily of direct external
                     costs, some of which may have been previously incurred and deferred,
                     along with labor costs and an allocation of certain overhead expenses
                     based on actual costs and time spent related to revenue generating
                     development arrangements. Cost of development revenue was $403,596
                     and $1,062,115 for the three and six-month periods ended June 30,
                     2010, respectively, compared to $175,235 and $820,289 for the same
                     prior-year periods. The increases in each period were due mainly to
                     increases in development costs recognized related to a License,
                     Development and Supply Agreement with Teva for a product containing
                     epinephrine utilizing our auto injector technology. Research and Development The majority of research and development expenses consist of external
                     costs for studies and analysis activities, design work and prototype
                     development. Our most significant projects currently include the
                     following: Anturol® oxybutynin gel for treatment of OAB;
                     Vibex autoinjector for delivery of epinephrine for emergency
                        treatment of allergic reactions; and
                     Vibex MTX autoinjector for delivery of methotrexate for treatment of
                        rheumatoid arthritis. Although we are engaged in research and development activities
                     involving each of our drug delivery platforms, over 75% of our total
                     research and development expenses in each period were generated in
                     connection with projects related to transdermal gel products,
                     primarily Anturol®. Research and development expenses were $2,242,788 and $4,328,613 in
                     the three and six-month periods ended June 30, 2010, respectively,
                     compared to $1,745,309 and $3,952,068 in the same periods of the
                     prior year. The increase in the first half of 2010 compared to the
                     same period of 2009 was due primarily to our Vibex MTX development
                     program. Since the Vibex epinephrine program is associated with a
                     License, Development and Supply Agreement with Teva, the costs have
                     been deferred and are recognized as cost of revenue when the related
                     revenue is recognized. Expenses incurred related to research and
                     development activities in Switzerland decreased in the first half of
                     2010 compared to 2009 as a result of the Asset Purchase Agreement
                     with Ferring at the end of 2009. Sales, Marketing and Business Development Sales, marketing and business development expenses totaled $241,278
                     and $571,799 for the three and six-month periods ended June 30, 2010,
                     respectively, compared to $216,863 and $552,380 in the same
                     prior-year periods. Decreases in consulting fees in 2010 were offset
                     by increases in payroll and travel expenses due to the addition of a
                     senior level business development employee in January of this year. General and Administrative General and administrative expenses totaled $1,121,957 and $2,339,589
                     in the three and six-month periods ended June 30, 2010, respectively,
                     compared to $1,140,951 and $2,452,965 in the same periods of the
                     prior year. General and administrative expenses associated with the
                     operations in Switzerland decreased significantly as a result of the
                     transaction with Ferring at the end of 2009. These decreases were
                     partially offset by increases in noncash stock compensation expenses
                     and other payroll expenses. Other Income (Expense) Other expense was $1,257 and $25,329 in the three and six-month
                     periods ended June 30, 2010, respectively, compared to expense of
                     $191,690 and $388,655 in the same periods of the prior year. The
                     decrease in expense resulted primarily from a decrease in interest
                     expense due to the retirement of our credit facility in the third
                     quarter of 2009.
 13


Liquidity and Capital Resources We have not historically generated sufficient revenue to provide the
                     cash needed to support our operations, and we have continued to
                     operate primarily by raising capital and incurring debt. In order to
                     better position ourselves to take advantage of potential growth
                     opportunities and to fund future operations, during 2009, we raised
                     additional capital and took steps to reduce our monthly cash
                     obligations. In July 2009, we raised gross proceeds of $8,500,000 in a registered
                     direct offering through the sale of shares of our common stock and
                     warrants. We sold a total of 10,625,000 units, each unit consisting
                     of (i) one share of common stock and (ii) one warrant to purchase 0.4
                     of a share of common stock (or a total of 4,250,000 shares), at a
                     purchase price of $0.80 per unit. The warrants became exercisable six
                     months after issuance at $1.00 per share and will expire five years
                     from the date of issuance. In September 2009, we raised gross proceeds of $3,000,000 through the
                     sale of 2,727,273 units to certain institutional investors, each unit
                     consisting of (i) one share of common stock and (ii) one warrant to
                     purchase 0.4 of a share of common stock (or a total of 1,090,909
                     shares), at a purchase price of $1.10 per unit. The warrants became
                     exercisable six months after issuance at $1.15 per share and will
                     expire five years from the date of issuance. The proceeds from the sale of common stock and warrants in September
                     2009 were used to pay off the remaining balance of our credit
                     facility, reducing our monthly debt service requirements. The credit
                     facility had originated in 2007, when we received gross proceeds of
                     $7,500,000 in two tranches of $5,000,000 and $2,500,000 to help fund
                     working capital needs. The per annum interest rate was 12.7% in the
                     case of the first tranche and 11% in the case of the second tranche.
                     The maturity date (i) with respect to the first tranche was forty-two
                     months from February 2007 and (ii) with respect to the second tranche
                     was thirty-six months from December 2007. In the fourth quarter of 2009, we reduced our monthly overhead when
                     we entered into an Asset Purchase Agreement with Ferring. Under this
                     agreement, Ferring assumed responsibility for all of our facility and
                     equipment lease obligations in connection with our operations in
                     Switzerland, and the majority of our employees at that location were
                     hired by Ferring effective January 1, 2010. Subsequent to the Ferring
                     agreement we entered into a month-to-month office lease agreement at
                     a new Swiss location in a much smaller space at a significantly
                     reduced monthly rate. In the first six months of 2010, we received proceeds of $1,692,826
                     in connection with exercises of options and warrants to purchase
                     shares of our common stock, which resulted in the issuance of
                     1,531,101 shares of our common stock. At June 30, 2010, we had cash and cash equivalents of $11,442,740. We
                     believe that the combination of our current cash and cash equivalents
                     balance and projected product sales, product development, license
                     revenues, milestone payments and royalties will provide us with
                     sufficient funds to support operations for at least the next 12
                     months. We do not currently have any bank credit lines. In the
                     future, if we need additional financing and are unable to obtain such
                     financing when needed, or obtain it on favorable terms, we may be
                     required to curtail development of new products, limit expansion of
                     operations or accept financing terms that are not as attractive as we
                     may desire. Cash Flows Net Cash Used in Operating Activities Net cash used in operating activities was $3,821,907 and $4,754,534
                     for the six-month periods ended June 30, 2010 and 2009, respectively.
                     The reduction in 2010 compared to 2009 was primarily due to a
                     decrease in the loss for the six-month period to $3,161,197 in 2010
                     compared to a loss of $5,059,768 in 2009. The decrease in the loss
                     was partially offset by an increase in cash used by changes in
                     operating assets and liabilities. In 2010, changes in operating
                     assets and liabilities resulted in a use of cash of $1,300,143, while
                     in 2009, changes in operating assets and liabilities resulted in a
                     use of cash of $424,518. The 2010 use of cash was driven primarily by
                     a decrease in accounts payable of $702,299 and deferred revenue of
                     $1,689,494 partially offset by a decrease in accounts receivable of
                     $801,466 and a decrease in deferred costs of $324,615. The 2009 use
                     of cash was driven primarily by a decrease in deferred revenue of
                     $1,350,943 partially offset by a decrease in accounts receivable of
                     $450,566 and a decrease in deferred costs of $449,584.
 14


Net Cash Used in Investing Activities Net cash used in investing activities was $72,590 and $87,001 for the
                     six-month periods ended June 30, 2010 and 2009, respectively. Cash
                     used for purchases of equipment, molds, furniture and fixtures was
                     $40,434 in 2010 compared to $1,081 in 2009 and additions to patent
                     rights was $47,136 in 2010 compared to $85,920 in 2009. In the first
                     six months of 2010, we received proceeds of $14,980 from the sale of
                     fully depreciated equipment that had been used at our Swiss location. Net Cash Provided by (Used in) Financing Activities In the first half of 2010, net cash provided by financing activities
                     consisted of proceeds from exercise of stock options and warrants of
                     $1,692,826. In the first half of 2009, net cash used in financing
                     activities of $1,206,917 consisted of principal payments on long-term
                     debt of $1,260,584 and proceeds from exercise of stock options and
                     warrants of $53,667. Research and Development Programs Our current research and development activities are primarily related to Anturol® and device development projects. Anturol®. We are currently evaluating Anturol® for the treatment of OAB. In
                     July 2010, we completed a Phase III pivotal trial designed to
                     evaluate the efficacy of Anturol® when administered topically once
                     daily for 12 weeks in patients predominantly with urge incontinence
                     episodes. The randomized, double-blind, parallel, placebo-controlled,
                     multi-center trial, involved approximately 600 patients (200 per arm)
                     using two dose strengths (selected from a Phase II clinical trial)
                     versus a placebo. In addition, an Open Label Extension study
                     evaluating long term safety is ongoing and scheduled to be complete
                     by the fourth quarter of 2010. We expect to file an NDA with the FDA
                     in 2010. There is no assurance that the FDA will accept our NDA when
                     filed or that the FDA will ultimately approve Anturol®, and without FDA approval we cannot market or sell Anturol®in the U.S. We have also incurred significant costs related to Anturol®
                     manufacturing development. We have contracted with Patheon, Inc.
                     ("Patheon"), a manufacturing development company, to supply clinical
                     quantities of Anturol® and to develop a commercial manufacturing
                     process for Anturol®. With Patheon, we have completed limited
                     commercial scale up activities associated with Anturol® manufacturing. As of June 30, 2010, we have incurred total external costs of
                     approximately $15,500,000 in connection with our Anturol® research
                     and development, of which approximately $2,600,000 was incurred in
                     the first half of 2010. We expect total expenses for Anturol® to be
                     approximately $5,000,000 in 2010. The additional costs relate to the
                     Phase III study closeout costs, safety study costs, NDA compilation
                     costs and manufacturing related costs. We intend to seek a marketing partner to help fund the development of
                     Anturol® and to commercially launch Anturol® if approved by the FDA.
                     To date, we have not entered into an agreement with a marketing
                     partner. Device Development Projects. We are engaged in research and development activities related to our
                     Vibex disposable pressure-assisted auto injectors and our disposable
                     pen injectors. We have signed license agreements with Teva for our
                     Vibex system for use with epinephrine and an undisclosed product and
                     for our pen injector device for two undisclosed products. We are also
                     developing a Vibex MTX autoinjector for delivery of methotrexate for
                     treatment of rheumatoid arthritis. Our pressure-assisted auto
                     injectors are designed to deliver drugs by injection from single-dose
                     prefilled syringes. The auto injectors are in the advanced commercial
                     stage of development. The disposable pen injector device is designed
                     to deliver drugs by injection through needles from multi-dose
                     cartridges. The disposable pen is in the early stage of development
                     where devices are being evaluated in clinical studies. Our
                     development programs consist of determination of the device design,
                     development of prototype tooling, production of prototype devices for
                     testing and clinical studies, performance of clinical studies, and
                     development of commercial tooling and assembly. In the second quarter of 2010 we entered into an agreement with Uman
                     Pharma under which both companies will invest jointly to develop and
                     commercialize Vibex MTX. We will lead the clinical development
                     program, FDA regulatory submissions, and retain rights to
                     commercialize the Vibex MTX product outside of Canada. Uman Pharma
                     will perform formulation development and manufacturing activities to
                     support the registration of Vibex MTX and supply methotrexate in
                     prefilled syringes to us for the U.S. market. Uman Pharma received an
                     exclusive license to commercialize the Vibex MTX product in Canada.
                     The companies intend to work together to commercialize the Vibex MTX
                     product in other territories. As of June 30, 2010, we have incurred total external costs of
                     approximately $5,400,000 in connection with research and development
                     activities associated with our auto and pen injectors, of which
                     approximately $1,000,000 was incurred in the first half of 2010. As
                     of June 30, 2010, approximately $3,900,000 of the total costs of
                     $5,400,000 was initially deferred, of which approximately $2,800,000
                     has been recognized as cost of sales and $1,100,000 remains deferred.
                     This remaining deferred balance will be recognized as cost of sales
                     over the same period as the related deferred revenue will be
                     recognized.
 15


The development timelines of the auto and pen injectors related to
                     the Teva products are controlled by Teva. We expect development
                     related to the Teva products to continue in 2010, but the timing and
                     extent of near-term future development will be dependent on certain
                     decisions made by Teva. In 2009, we received a payment from Teva in
                     the amount of $4,076,375 in connection with an amendment to a
                     License, Development and Supply Agreement signed in July 2006 related
                     to a fixed, single-dose, disposable injector product containing
                     epinephrine using our Vibex auto injector platform. Although this
                     payment and certain upfront and milestone payments have been received
                     from Teva, there have been no commercial sales from the auto injector
                     or pen injector programs, timelines have been extended and there can
                     be no assurance that there ever will be commercial sales or future
                     milestone payments under these agreements. Other research and development costs. In addition to the Anturol® project, Teva related device development projects and our Vibex MTX
                     development project, we incur direct costs in connection with other
                     research and development projects related to our technologies and
                     indirect costs that include salaries, administrative and other
                     overhead costs of managing our research and development projects.
                     Total other research and development costs were approximately
                     $1,300,000 for the six months ended June 30, 2010. Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements, including any
                     arrangements with any structured finance, special purpose or variable
                     interest entities. Critical Accounting Policies We have identified certain of our significant accounting policies
                     that we consider particularly important to the portrayal of our
                     results of operations and financial position and which may require
                     the application of a higher level of judgment by management and, as a
                     result, are subject to an inherent level of uncertainty. These
                     policies are characterized as "critical accounting policies" and
                     address revenue recognition and valuation of long-lived and
                     intangible assets and goodwill, as more fully described under
                     "Management's Discussion and Analysis of Financial Condition and
                     Results of Operations" in our Annual Report on Form 10-K for the year
                     ended December 31, 2009. We have made no changes to these policies
                     during the six-month period ended June 30, 2010. Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Our primary market risk exposure is foreign exchange rate
                     fluctuations of the Swiss Franc to the U.S. dollar as the financial
                     position and operating results of our subsidiaries in Switzerland are
                     translated into U.S. dollars for consolidation. Our exposure to
                     foreign exchange rate fluctuations also arises from transferring
                     funds to our Swiss subsidiaries in Swiss Francs. In addition, we have
                     exposure to exchange rate fluctuations between the Euro and the U.S.
                     dollar in connection with the licensing agreement entered into in
                     January 2003 with Ferring, which established pricing in Euros for
                     products sold under the supply agreement and for all royalties. In
                     March 2007, we amended the 2003 agreement with Ferring, establishing
                     prices in U.S. dollars rather than Euros for certain products,
                     reducing the exchange rate risk. Most of our sales and licensing fees
                     are denominated in U.S. dollars, thereby significantly mitigating the
                     risk of exchange rate fluctuations on trade receivables. We do not
                     currently use derivative financial instruments to hedge against
                     exchange rate risk. Because exposure increases as intercompany
                     balances grow, we will continue to evaluate the need to initiate
                     hedging programs to mitigate the impact of foreign exchange rate
                     fluctuations on intercompany balances. The effect of foreign exchange
                     rate fluctuations on our financial results for the six-month period
                     ended June 30, 2010 was not material. Item 4. CONTROLS AND PROCEDURES. Disclosure Controls and Procedures The Company's management, with the participation of the Company's
                     Chief Executive Officer and Chief Financial Officer, has evaluated
                     the effectiveness of the Company's disclosure controls and procedures
                     (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the
                     Securities Exchange Act of 1934, as amended) as of the end of the
                     period covered by this report. Based on such evaluation, the
                     Company's Chief Executive Officer and Chief Financial Officer have
                     concluded that the Company's disclosure controls and procedures as of
                     the end of the period covered by this report have been designed and
                     are functioning effectively to provide reasonable assurance that the
                     information required to be disclosed by the Company in reports filed
                     under the Securities Exchange Act of 1934, as amended, is recorded,
                     processed, summarized and reported within the time periods specified
                     in the Securities and Exchange Commission's rules and is accumulated
                     and communicated to management, including the Company's principal
                     executive and principal financial officers, or persons performing
                     similar functions, as appropriate to allow timely decisions regarding
                     required disclosure.
 16


Internal Control over Financial Reporting There have not been any changes in the Company's internal control
                     over financial reporting during the fiscal quarter to which this
                     report relates that have materially affected, or are reasonably
                     likely to materially affect, the Company's internal control over
                     financial reporting. A control system, no matter how well conceived and operated, can
                     provide only reasonable, not absolute, assurance that the objectives
                     of the control system are met. Because of the inherent limitations in
                     all control systems, no evaluation of controls can provide absolute
                     assurance that all control issues and instances of fraud, if any,
                     within the Company have been detected. The design of any system of
                     controls is also based in part upon certain assumptions about the
                     likelihood of future events, and there can be no assurance that any
                     design will succeed in achieving its stated goals under all potential
                     future conditions; over time, control may become inadequate because
                     of changes in conditions, or the degree of compliance with the
                     policies or procedures may deteriorate. Because of the inherent
                     limitations in a cost-effective control system, misstatements due to
                     error or fraud may occur and not be detected.
 17


PART II - OTHER INFORMATION Item 1A.
                           
                           
                           RISK FACTORS.In addition to the other information contained in this report, you
                              should carefully consider the risk factors discussed in Part I, "Item
                              1A. Risk Factors" in our Annual Report on Form 10-K for the year
                              ended December 31, 2009, which could materially affect our business,
                              financial condition or future results. The risks described in our
                              Annual Report on Form 10-K are not the only risks facing us.
                              Additional risks and uncertainties not currently known to us or that
                              we currently deem to be immaterial also may materially adversely
                              affect our business, financial condition and/or operating results.Item 6.
                           
                           
                           Exhibits.(a)
                           
                           
                           Exhibit IndexExhibit No.
                           
                           
                           Description4.1
                           
                           
                           Antares Pharma, Inc. 2008 Equity Compensation Plan, as amended.
                              (Filed as Exhibit 4.1 to the Registration Statement on Form S-8 filed
                              with the Commission on June 11, 2010 and incorporated herein by
                              reference).31.1
                           
                           
                           Certificate of the Chief Executive Officer of Antares Pharma, Inc.
                              required by Rule 13a-14(a) under the Securities Exchange Act of 1934,
                              as amended.31.2
                           
                           
                           Certificate of the Chief Financial Officer of Antares Pharma, Inc.
                              required by Rule 13a-14(a) under the Securities Exchange Act of 1934,
                              as amended.32.1
                           
                           
                           Certificate of the Chief Executive Officer of Antares Pharma, Inc.
                              required by Rule 13a-14(b) under the Securities Exchange Act of 1934,
                              as amended.32.2
                           
                           
                           Certificate of the Chief Financial Officer of Antares Pharma, Inc.
                              required by Rule 13a-14(b) under the Securities Exchange Act of 1934,
                              as amended.
 18


SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934,
                     the registrant has duly caused this Report to be signed on its behalf
                     by the undersigned thereunto duly authorized. ANTARES PHARMA, INC.August 12, 2010
                           
                           
                           
                           
                           
                           /s/ Paul K. WottonDr. Paul K. WottonPresident and Chief Executive OfficerAugust 12, 2010
                           
                           
                           
                           
                           
                           /s/ Robert F. AppleRobert F. AppleExecutive Vice President and Chief Financial Officer
 19