LPCN US Equity☆

Item 1A. Risk Factors 22

Item 1B. Unresolved Staff Comments 51

Item 1C. Cybersecurity 51

Item 2. Properties 52

Item 3. Legal Proceedings 52

Item 4. Mine Safety Disclosures 52

PART II

Item 6. Reserved 53

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 62

Item 8. Financial Statements and Supplementary Data 63

Item 9A. Controls and Procedures 92

Item 9B. Other Information 92

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 92

PART III

Item 10. Directors, Executive Officers and Corporate Governance 93

Item 11. Executive Compensation 93

Item 14. Principal Accountant Fees and Services 93

PART IV

Item 15. Exhibits and Financial Statement Schedules 93

FORWARD-LOOKING

STATEMENTS

THIS

ANNUAL REPORT ON FORM 10-K, IN PARTICULAR “ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS

OF OPERATION,” AND “ITEM 1. BUSINESS,” CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE

SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, that involve risks and uncertainties.

Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that

does not directly relate to any historical or current fact. Forward-looking statements may refer to such matters as products, product

benefits, pre-clinical and clinical development timelines, clinical and regulatory expectations and plans, REGULATORY DEVELOPMENTS AND

REQUIREMENTS, THE RECEIPT OF REGULATORY APPROVALS, THE EXPECTATIONS FOR AND RESULTS OF CLINICAL TRIALS, PATIENT ACCEPTANCE OF LIPOCINE’S

PRODUCTS, MANUFACTURING AND COMMERCIALIZATION OF LIPOCINE’S PRODUCTS, anticipated financial performance, future revenues or earnings,

business prospects, projected ventures, new products and services, anticipated market performance, future expectations for liquidity

and capital resources needs and similar matters. Such words as “may”, “will”, “expect”, “continue”,

“estimate”, “project”, “intend”, and “potential” and similar terms and expressions are

intended to identify forward looking statements. Forward-looking statements are not guarantees of future performance and our actual results

may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include,

but are not limited to, those discussed in Part I, Item 1A “Risk Factors” of this Form 10-K. Except as required by applicable

law, we assume no obligation to revise or update any forward-looking statements for any reason.

There

are a number of risks, uncertainties and other important factors that could cause our actual results to differ materially from the forward-looking

statements contained in this Annual Report on Form 10-K. Such risks, uncertainties and other important factors include, among others,

the risks, uncertainties and factors set forth in “Risk Factors,” and the following risks, uncertainties and factors:

● our ongoing and planned clinical trials;

● our ability to monetize non-core product candidates;

● significant competition in our industry;

● our intellectual property position;

● loss of key members of management;

● failure to successfully execute our strategy; and

● our failure to maintain effective internal controls.

There

may be other factors that may cause our actual results to differ materially from the forward-looking statements, including factors disclosed

in “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

You should evaluate all forward-looking statements made in this Annual Report on Form 10-K in the context of these risks and uncertainties.

We

caution you that the risks, uncertainties and other factors referred to above may not contain all of the risks, uncertainties and other

factors that are important to you. In addition, we cannot assure you that we will realize the results, benefits or developments that

we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our business in

the way expected. All forward-looking statements in this Annual Report on Form 10-K apply only as of the date made and are expressly

qualified in their entirety by the cautionary statements included in this Annual Report on Form 10-K. We undertake no obligation to publicly

update or revise any forward-looking statements to reflect subsequent events or circumstances.

PART

I

ITEM 1.BUSINESS

General

Lipocine Inc. (“Lipocine” or the “Company”)

is incorporated under the laws of the State of Delaware.

We

are a biopharmaceutical company focused on leveraging our proprietary Lip’ral platform to develop differentiated products through

the oral delivery of previously difficult to deliver molecules, focused on treating Central Nervous System (“CNS”) disorders.

Our proprietary delivery technologies are designed to improve patient compliance and safety through orally available treatment options.

Our primary development programs are based on oral delivery solutions for poorly bioavailable drugs. We have a portfolio of differentiated

innovative product candidates that target high unmet needs for neurological and psychiatric CNS disorders, liver diseases, and hormone

supplementation for men and women.

We

entered into a license agreement for the development and commercialization of our product candidate, TLANDO®, an oral treatment indicated

for testosterone replacement therapy (“TRT”) in adult males for conditions associated with a deficiency or absence of endogenous

testosterone (primary or hypogonadotropic hypogonadism) comprised of testosterone undecanoate (“TU”). On January 12, 2024,

we entered into a license agreement (the “Verity License Agreement”) with Gordon Silver Limited (“GSL”) and Verity

Pharmaceuticals, Inc. (“Verity” or our “Licensee”), pursuant to which we granted to Verity an exclusive, royalty-bearing,

sublicensable right and license to commercialize TLANDO for TRT in the U.S. and Canada. Any required post-marketing studies by the United

States Food and Drug Administration (“FDA”) will also be the responsibility of our Licensee, Verity. On January 31, 2024,

our license agreement with former licensee, Antares Pharma, Inc. (“Antares”), was terminated and the transition of the U.S.

commercial rights for TLANDO from Antares to Verity was completed on February 1, 2024, for the distribution, marketing and sale of TLANDO.

The Verity License Agreement also provides Verity with a license to develop and commercialize LPCN 1111 (also referred to as TLANDO XR),

the Company’s potential next generation, once daily oral product candidate for testosterone replacement therapy comprised of testosterone

tridecanoate (“TT”), in the U.S. and Canada.

Additional clinical development pipeline candidates include: LPCN 1154

for postpartum depression (“PPD”); LPCN 2101 for epilepsy; LPCN 2203 for essential tremor; and LPCN 1148 comprising a novel

prodrug of testosterone, testosterone laurate (“TL”), for the management of decompensated cirrhosis. In addition to our CNS

product candidates, we have non-core assets for which we expect to seek partnerships to enable further development for which we do not

plan to devote significant resources to developing in the future. These non-core assets include TLANDO for territories outside of North

America, LPCN 1148 which we intend to explore partnering upon completion of the Phase 2 study, LPCN 1144, an oral prodrug of androgen

receptor modulator for the treatment of non-cirrhotic non-alcoholic steatohepatitis (“NASH”) which has completed Phase 2 testing;

and LPCN 1107, potentially the first oral hydroxy progesterone caproate (“HPC”) product indicated for the prevention of recurrent

preterm birth (“PTB”), which has completed a dose finding clinical study in pregnant women and has been granted orphan drug

designation by the FDA.

The

following charts summarize the status of our product candidate development programs:

Corporate

Strategy

Our

goal is to become a leading biopharmaceutical company focused on leveraging our proprietary Lip’ral drug delivery technology platform

to develop differentiated products through oral delivery of previously difficult to deliver molecules for CNS disorders. The key components

of our strategy are to:

Advance

LPCN 1154 and other CNS product candidates. We intend to focus on the development of endogenous neuroactive steroids (“NAS”)

which have broad applicability in treating various CNS conditions where we can leverage our technology platform to develop highly differentiated

oral therapeutics. Our priority is on the development of LPCN 1154, a fast-acting oral antidepressant for postpartum depression (“PPD”)

with potential for outpatient use.

Support

our Licensee in commercialization of our licensed oral TRT option. We believe the TRT market needs a differentiated, convenient oral

option. We have exclusively licensed rights to TLANDO to Verity for commercialization of TLANDO in the U.S. and Canada and have also

exclusively licensed development and commercialization rights for LPCN 1111 in the U.S. and Canada to Verity. We plan to support our

Licensee’s efforts to effectively enable the availability of TLANDO to patients in a timely manner, in addition to receiving milestone

and royalty payments associated with TLANDO commercialization as agreed to in the Verity License Agreement.

Develop

partnership(s) to continue the advancement of non-core pipeline assets. We continuously strive to prioritize our resources in seeking

partnerships of our pipeline assets. We are currently exploring partnering (i) LPCN 1144, our candidate for treatment of non-cirrhotic

NASH, (ii) LPCN 1148, for the management of decompensated cirrhosis, and (iii) LPCN 1107, our candidate for prevention of pre-term birth.

We are also exploring the possibility of licensing LPCN 1021 (known as TLANDO in the United States) to third parties outside the United

States and Canada, although no licensing agreement has been entered into by the Company.

Our

Development Pipeline Product Candidates

Our pipeline of clinical development candidates includes LPCN 1154

for postpartum depression (“PPD”), LPCN 2101 for epilepsy, LPCN 1148, an androgen therapy for the management of cirrhosis

and LPCN 2203 for essential tremor. We will continue to explore other product development candidates targeting CNS indications with a

significant unmet need. We will also continue efforts to enter into partnership arrangements for the continued development and/or marketing

of LPCN 1144, LPCN 1148, and LPCN 1107 and for TRT assets (TLANDO and LPCN 1111) outside of the United States and Canada.

Our

products are based on our proprietary Lip’ral drug delivery technology platform. Lip’ral-based TLANDO was approved by the

FDA in March 2022. Lip’ral technology is a patented technology based on lipidic compositions which form an optimal dispersed phase

in the gastrointestinal environment for improved absorption of insoluble drugs. The drug loaded dispersed phase presents the solubilized

drug efficiently at the absorption site (gastrointestinal tract membrane) thus improving the absorption process and making the drug less

dependent on physiological variables such as dilution, gastro-intestinal pH and food effects for absorption. Lip’ral-based formulation

enables improved solubilization and higher drug-loading capacity, which can lead to improved bioavailability, reduced dose, faster and

more consistent absorption, reduced variability, reduced sensitivity to food effects, improved patient compliance, and targeted lymphatic

delivery where appropriate.

Oral

Programs for CNS Disorders

Some

preferred endogenous or naturally occurring NAS present in central nervous system act as positive allosteric modulators (“PAM”)

of the GABAA receptor, the major biological target of the inhibitory neurotransmitter γ-aminobutyric acid (“GABAA”).

To improve oral delivery of these modulators, several synthetic NAS derivatives of endogenous GABAA receptor PAMs, have been

developed for therapeutic use in the past few decades.

We believe through utilization of our proprietary technology we may have

the ability to enable effective oral delivery of endogenous GABAA receptor PAMs which historically had been deemed to be not

orally bioavailable. As a novel drug class, NAS have received considerable attention because of their potential to treat various neuropsychiatric

conditions including depression, movement disorders, epilepsy, anxiety, and neurodegenerative diseases. We have conducted Phase 1 pharmacokinetic

(“PK”) studies for each of our three lead NAS candidates which have demonstrated promising PK results, safety, and tolerability,

and we will continue to evaluate additional undisclosed CNS-focused candidates.

LPCN

1154: Product Candidate for PPD

Our

most advanced NAS candidate is LPCN 1154, a non-invasive, oral formulation of the neuroactive steroid brexanolone which we are

developing for the treatment of PPD. The FDA agreed with our proposal for establishing the efficacy of LPCN 1154 through a pivotal

PK bridge to an approved IV infusion brexanolone via a 505(b)(2) NDA filing. The company has completed an oral PK study, a food

effect study, and a pilot PK bridge study of LPCN 1154, as a prelude to a pivotal study using the scaled up “to be

marketed” formulation required for NDA filing.

PPD

PPD

(“Postpartum depression”), a type of major depressive disorder with onset either during pregnancy or within four weeks of

delivery, refers to depression persisting up to 12 months after childbirth. PPD can be clinically segmented by the severity of symptoms

and presence of a comorbidity, including epilepsy. Approximately 1 in 8 mothers suffers from PPD in the United States alone; this equates

to approximately 500,000 women being affected by PPD annually.

Disease

Overview - PPD

Associated

Risk Factors

Unmet

Medical Need

We

believe there is considerable unmet need within women with PPD due to lack of convenient and fast-acting oral therapies. Selective Serotonin

Reuptake Inhibitors (“SSRIs”) have been the traditional first-line choice for women with severe PPD requiring weeks for onset

of efficacy; therefore, a need for an oral treatment option with a faster onset of action remains a significant unmet need in treating

PPD, especially in mothers with moderate to severe depression prone

to harmful actions.

Injectable brexanolone (ZulressoTM, SAGE Therapeutics) became

the first FDA-approved treatment for postpartum depression. However, numerous factors limit the utilization of injectable brexanolone

such as method of administration, cost, and safety concerns. In addition to Zulresso, SAGE Therapeutics received FDA approval for zuranolone

(brand name ZURZUVAETM) in August, 2023 and Zurzuvae was launched commercially in December 2023. Zuranolone, a synthetic neuroactive

steroid derivative, is an oral, once daily 14-day treatment for postpartum depression and is the first oral medication approved by the

FDA for the treatment of postpartum depression. Per label, besides long terminal half-life of approximately 19.7 to 24.6 hours and dosage

modifications needed for concomitant use with CYP3A4 modulators, warnings and precautions include CNS depressant effects, impaired ability

to drive or engage in other potentially hazardous activities and embryo-fetal toxicity.

We believe LPCN 1154 targets the unmet need for robust rapid relief

with 48-hour treatment duration through a convenient oral treatment candidate comprising bioidentical NAS with good tolerability.

LPCN

2101: NAS for Epilepsy

We

are currently evaluating an additional NAS candidate, LPCN 2101, for women with epilepsy (“WWE”). We have completed pre-clinical

and Phase 1 studies for LPCN 2101 which demonstrated promising PK results, safety and tolerability. In July 2022 our IND was accepted

by the FDA for LPCN 2101 for adults with epilepsy and we plan to initiate a Phase 2 IND opening proof-of-concept study to evaluate the

safety, tolerability, and efficacy of LPCN 2101 in 2024 subject to resource prioritization.

Disease

Overview – Epilepsy

Epilepsy

is defined by the 1) occurrence of at least two unprovoked seizures more than 24 hours apart, 2) occurrence of one unprovoked

seizure and a probability of further seizures occurring over the next 10 years, and/or 3) diagnosis of an epilepsy syndrome.

Patients with epilepsy are more likely to be comorbid with other conditions, including depression and anxiety. Patients with

epilepsy have increased risk of mortality due to direct effects of seizures (e.g., status epilepticus, car accidents) and indirect

effects of seizures (e.g., suicide, cardiovascular effects.)

Epilepsy

is a disorder of the brain that causes seizures, affecting the physical, mental, and social well-being of persons, and is associated

with a 2 to 3 times greater mortality rate compared with the general population. About 60-65% of epilepsy is idiopathic and about 30%

of patients are refractory (i.e., epilepsy not well managed with currently available Anti-Seizure Medications (“ASMs”). Epilepsy

is the most common neurological disorder during pregnancy.

It

is estimated that approximately 900,000 child-bearing (“CB”) age women suffer from active epilepsy in the U.S. Women of CB

age with epilepsy face many additional challenges due to hormonal influences on seizure activity and endocrine function throughout the

different phases of their reproductive cycles. Elevated estrogen or decreased progesterone levels can exacerbate seizure frequency. Often,

these women experience hormonal and endogenous NAS imbalances, coupled with fluctuations in the blood levels of ASMs that impact control

of seizures, efficacy of oral contraceptives, any coexisting anxiety and/or depression and any associated sleep impairment. Epileptic

patients are 5-20 times more likely to develop depression.

Clinical

segmentation can be categorized by epilepsy type, comorbidities and patient subgroups. Categorization of focal epilepsy, generalized

epilepsy, combined focal and generalized epilepsy, and unknown epilepsy can guide the choice of ASM. Special patient subgroups, including

WWE of CB age and elderly patients, require special care and management of epilepsy. Comorbidities such as depression and anxiety may

be co-treated with therapies that do not aggravate seizures and have no drug interaction with the ASM used for epilepsy. While lowest

effective dose and monotherapy are preferred, management of patients with epilepsy is focused on controlling seizures, avoiding adverse

events, and maintaining quality of life. Despite a wide range of ASMs available, about 30 % of all people with epilepsy still fail to

respond to treatment effectively. Women with epilepsy face specific challenges throughout their lifespan because of seizures, ASMs, and

hormonal fluctuations.

Women

with epilepsy were once counseled to avoid pregnancy, but epilepsy is no longer considered a contraindication to pregnancy. Caregivers

for WWE in the preconception phase either intending to start a family (planning pregnancy) or using contraception to prevent an unplanned

pregnancy face significant challenges to balance seizure control efficacy with the selection and dosage of ASMs and ASM-related risks

such as, among other risks, fetal-neonatal toxicity, contraception failure, and psychiatric side effects.

Several

ASMs are known to have teratogenic effects on the developing fetus (converging evidence from registry studies indicates that teratogenic

risks are highest with valproate, followed by carbamazepine and topiramate). Other commonly prescribed ASMs, including older generation

agents, such as phenobarbital and phenytoin, have been associated with higher risks as compared with lamotrigine, levetiracetam, clonazepam

and gabapentin (Vajda et al., 2014; Voinescu and Pennell, 2015). Moreover, risks associated with ASMs are considerable early in pregnancy;

therefore, it is necessary that WWE of CB age undergo counseling, monitoring, and adjustment to the most appropriate ASM prior to becoming

pregnant. It is preferable that WWE of CB age discuss seizure control with their doctor for at least 6 months before conception and,

if possible, cease ASM therapy or use the lowest effective dose of a single anticonvulsant according to the type of epilepsy and the

fetal toxicity of the ASM. Anxiety, depression, lack of adherence to ASM, and/or contraception failure may be experienced by women who

are worried about unplanned pregnancy or are late in confirming pregnancy, planned or unplanned. ASMs can reduce the efficacy of oral

contraceptives, compounding this problem.

Complex,

multidirectional interactions between female hormones, seizures, and ASMs exist. Most hormones act as NAS and can thus modulate brain

excitability. Any changes in endogenous or exogenous hormone levels can affect the occurrence of seizures, either directly or via PK

interactions that modify the plasma levels of ASMs (Harden, 2008). The PK interactions between oral contraceptives and ASMs are bidirectional

(Johnston and Crawford, 2014). The efficacy of hormonal contraception may be diminished for women taking CYP-P450 enzyme inducing ASMs.

Epilepsy is not a medical condition in which contraceptives are contraindicated. Contraceptive failure, possibly related to ASMs, may

be responsible for up to 1 in 4 unplanned pregnancies in WWE (~12.5% of all WWE pregnancies), versus a rate of 1% in healthy women.

Unmet

need to treat WWE in CB age

It

is estimated that approximately 900,000 CB age women suffer from active epilepsy in the U.S. Women of CB age with epilepsy face many

additional challenges such as hormonal influences on seizure activity and endocrine function throughout the different phases of their

reproductive cycles, and approximately 30% of patients with epilepsy cannot be efficiently controlled with available ASMs making consideration

of newer pharmacological treatment development options important.

Managing

uncontrolled seizures in WWE of CB age is the primary aim during preconception, pregnancy, and postpartum phases. Therefore, uncompromised

ASM efficacy with acceptable variability and less or no drug-drug interactions achieved with lowest possible monotherapy dose to address

fetal toxicity concerns remain highly unmet needs. Moreover, control of seizures including prevention of breakthrough seizures is critical

when planning for pregnancy and also during pregnancy, as it can also lead to undesired falls or auto-accidents and compromise freedom

to drive.

Select

ASMs have the potential to induce contraception failures, reproductive hormone imbalance, anxiety, and depression. There remains an unmet

need for an ASM without the aforementioned downsides, with no to low fetal-neonatal toxicity and without any breast-feeding concerns

as well as potential to treat associated comorbidities.

While

over 30 molecules have been approved for the treatment of epilepsy in the U.S., no epilepsy drug has been specifically approved for WWE

of CB age. We believe our endogenous NASs as GABAA PAMs, while targeting the goal of seizure control, also have the potential

for additional benefits in psychiatric disorders comorbidities (e.g., anxiety and/or depression) and sleep impairment. Moreover, these

oral endogenous NAS could potentially address some of the fetal toxicity concerns related to unplanned or planned pregnancy in WWE. (1)

(1)

Ref: S.Bangar et al. Functional Neurology 2016; 31(3): 127-134; Reimers et al. Seizure. 2015 May; 28: 66-70.

LPCN

1148: Oral Product Candidate for the Management of Decompensated Cirrhosis

We

are currently evaluating LPCN 1148 comprising testosterone laurate (“TL”) for the management of decompensated cirrhosis.

We believe LPCN 1148 targets unmet needs for subjects with cirrhosis including improvement in the quality of life of patients while on

the liver transplant waiting list, prevention or reduction in the occurrence of new decompensation events such as hepatic encephalopathy

(“HE”), and improvement in post liver transplant survival, including outcomes and costs.

We

recently completed a Phase 2 proof of concept (“POC”) study (NCT04874350) in male cirrhotic subjects to evaluate the

therapeutic potential of LPCN 1148 for the management of sarcopenia. The Phase 2 POC study was a prospective, multi-center,

randomized, placebo-controlled study in male sarcopenic cirrhotic patients. Subjects were initially randomized 1:1 to 1 of 2 arms.

The treatment arm was an oral dose of LPCN 1148, and the second arm was a matching placebo. There were no restrictions on patients

with respect to background therapies, including current standard of care, diet or exercise. The primary endpoint was a change in

skeletal muscle index at week 24 with key secondary endpoints including change in liver frailty index, rates of breakthrough HE, and

number of waitlist events, including all-cause mortality. Total treatment was 52 weeks, with 24-week placebo-controlled treatment

subjects receiving LPCN 1148 in the 28-week open-label extension (“OLE”) phase of the study for the duration of the

study through week 52. In July 2023, we announced that the Phase 2 study met the study primary endpoint, increased skeletal muscle

index (L3-SMI) relative to placebo (P<.01), in patients with cirrhosis. The study also demonstrated improvements in clinical

outcomes such as prevention of new decomposition events including HE, rates of hospitalizations, and patient reported outcomes

(“PROs”). LPCN 1148 was well-tolerated, with adverse event (“AE”) rates and severities similar to placebo

and no mortality was noted in the LPCN 1148 treatment group, nor were there any cases of drug-induced liver injury.

End

of study results are expected by the end of the first quarter of 2024. Possible outcomes of interest from the Phase 2 study include continuation

and/or extension of clinical outcomes observed after 24 weeks such as overall survival and new decompensation events (including HE and/or

ascites occurrences), rates of survival to transplant, rates of hospitalizations, infections, etc., muscle changes such as muscle mass,

body composition, myosteatosis (muscle fat), functional capacity changes such as liver frailty index (“LFI”), PROs, and biochemical

markers including hematocrit for anemia status, albumin, creatinine/kidney function, etc. We plan to request a Type C meeting with the

FDA to discuss the clinical development plan for LPCN 1148 in mid-2024.

Disease

Overview – Cirrhosis

There

are over 2 million cases of cirrhosis worldwide, with over 500,000 people living with decompensated cirrhosis in the U.S. and nonalcoholic

fatty liver disease is the most rapidly increasing indication for liver transplant. 62% of those on the liver transplant (“LT”)

waitlist are male and the economic burden (approximately $812,500/transplant) is high and continues to increase. Each year about half

of the approximately 17,000 people in U.S. on the LT waitlist undergo transplant, while nearly 3,000 patients either die or are removed

from the list because they were “too sick to transplant.”

Liver

cirrhosis is defined as the histological development of regenerative nodules surrounded by fibrous bands. Cirrhotic patients typically

have a years-long silent, asymptomatic phase (compensated cirrhosis) until decreasing liver function and increasing portal pressure move

the patient into the symptomatic phase (decompensated cirrhosis). Transition to decompensated cirrhosis is marked by clinical events

including ascites, encephalopathy, jaundice, and/or variceal hemorrhage. Decompensated subjects survive on average less than 2 years.

Common causes of liver cirrhosis include alcoholic liver disease, nonalcoholic fatty liver disease (“NAFLD”), chronic hepatitis

B and C, primary biliary cirrhosis (“PBC”), primary sclerosing cholangitis (“PSC”) and cryptogenic.

Common

complications in cirrhotic patients may include: compromised liver function, portal hypertension, varices in GI tract with internal bleeding,

edema, ascites, hepatic encephalopathy, compromised immunity with post-transplant acute rejection risk, high sodium levels, increased

bilirubin, low albumin level, insulin resistance with impaired peripheral uptake of glucose, depression, accelerated muscle disorder

in the form of sarcopenia, myosteotosis, and frailty with compromised energetics, bone diseases (e.g., osteoporosis), high alkaline phosphatase

(“ALP”), cachexia, malnutrition, weight loss (>5%), symptoms of hypogonadism such as abnormal hair distribution, anemia,

sexual dysfunction, testicular atrophy, muscle wasting, fatigue, osteoporosis, gynecomastia, inflammation with elevated cytokines, and

infection risk leading to hospital admissions and possibly death.

HE,

a significant decompensation event in patients with cirrhosis, is a brain dysfunction caused by liver insufficiency and/or portal systemic

shunting. Because the damaged liver cannot function normally (as in cirrhosis), neurotoxins such as ammonia are inadequately removed

from systemic circulation and travel to the brain, where they affect neurotransmission. This can cause episodes of HE, which may present

as alterations in consciousness, cognition, and behavior that range from minimal to severe. Overt HE occurs in 30% to 40% of patients

with cirrhosis at some point during the clinical course of their disease. As the burden of chronic liver disease and cirrhosis is increasing,

the frequency of HE is also increasing.

LPCN

2203: Oral Product for Management of Essential Tremor

About

Essential Tremor:

Essential

Tremor (“ET”) is one of the most common movement disorders in the United States, affecting an estimated 7 million in the U.S. For ET

patients, uncontrollable shaking of the hands, head, voice, or legs creates difficulty eating, dressing, writing, and pursuing other

day-to-day tasks. The etiology of ET is largely unknown, but reduced GABAA receptor levels and decreased GABAergic activity have been

observed in ET.

While

ET is often associated with aging populations, ET can begin much earlier in life, with a progressive disease course that can

eventually necessitate a care partner. Social anxiety and depressive symptoms can manifest in patients with ET as tremor severity

increases and may negatively impact a patient’s ability to work and engage in hobbies. In an interview study of ET patients

and care partners, the most common impacts on activities of daily living are pouring liquids and writing/typing (100%), and grooming/hygiene,

drinking, dressing, eating, and reading (80-85%). Overall, 90% of participants noted the emotional impact of ET, with 75% reporting tremor-related

worry or anxiety.

The

only FDA approved pharmacological treatment for ET was approved more than 50 years ago, and the majority

of patients with ET experience a sub-optimal response with standard-of-care treatments, highlighting numerous and compelling unmet needs

in care such as daytime efficacy and improved tolerability, PRN or “as needed use” option, and a superior benefit-to-risk

profile.

LPCN

2203 is an oral candidate for management of essential tremor comprising a bioidentical GABA modulating NAS. We have successfully completed

oral pharmacokinetics with bioidentical GABA Modulating NAS and are planning to submit a protocol for a proof-of-concept phase 2 study

for ET in the first half of 2024.(1) (2)

(1) Ref: Louis ED, Ottman R. Tremor Other Kyperkinet Mov (NY). 2014;4:259.

Our

Partnership Pipeline Product Candidates

We

continue to pursue opportunities for partnering arrangements for the continued development and/or marketing of LPCN 1144, LPCN 1148,

LPCN 1107, in addition to TLANDO and LPCN 1111 outside of the U.S. and Canada. We do not currently anticipate conducting any further significant

development activities with respect to these products and product candidates, without the participation of a partner. There can be no

guarantee that we will be able to identify or enter into partnering arrangements on terms that are beneficial to us or at all. Even if

we do enter into partnering arrangements, such arrangements may not be sufficient to successfully develop and commercialize these products.

TLANDO:

An Oral Product for Testosterone Replacement Therapy

As

previously described, under the Verity License Agreement, in January 2024 we granted to Verity an exclusive, royalty-bearing, sublicensable

right and license to develop and commercialize TLANDO, our product for TRT, in the U.S. and Canada effective February 1, 2024. TLANDO

received FDA approval on March 28, 2022. Any FDA requirement to conduct certain post-marketing studies will be the responsibility of

our Licensee, Verity.

Proof-of-concept

for TLANDO was initially established in 2006, and subsequently TLANDO was licensed in 2009 to Solvay Pharmaceuticals, Inc., which was

then acquired by Abbott Products, Inc. (“Abbott”). Following a portfolio review associated with the spin-off of AbbVie Inc.

by Abbott in 2011, the rights to TLANDO were reacquired by us. All obligations under the prior license agreement have been completed

except that Lipocine will owe Abbott a perpetual 1% royalty on net sales of TLANDO. Such royalties are limited to $1 million in the first

2 calendar years following product launch, after which period there is no cap on royalties and no maximum aggregate amount. If generic

versions of any such product are introduced, then royalties are reduced by 50%. TLANDO was commercially launched on June 7, 2022. During

the years ended December 31, 2023 and December 31, 2022, we incurred royalty expense of approximately $34,000 and $12,000, respectively,

resulting from net sales of TLANDO.

Under

the Pediatric Research Equity Act (“PREA”), since TLANDO received full FDA approval, under the Verity Licensing Agreement,

Verity will need to address the PREA requirement to assess the safety and effectiveness of TLANDO in pediatric patients. The FDA may

also require certain post-marketing studies to be conducted which will also be the responsibility of our Licensee, Verity.

Upon

execution of the Verity License Agreement, Verity paid us an initial payment of $2.5 million which was received on signing of the License

Agreement and $5 million received on February 1, 2024. Verity is also required to make an additional payment of $2.5 million to us before

January 1, 2025 and an additional payment of $1 million to us before January 1, 2026. We are also eligible to receive milestone payments

of up to $259 million in the aggregate, depending on the achievement of certain sales milestones in a single calendar year and/or development

milestones with respect to products licensed by Verity under the Verity License Agreement. In addition, we will receive tiered royalty

payments at rates ranging from 12% to up to 18% of net sales of TLANDO in the United States and Canada.

We

are exploring the possibility of licensing LPCN 1021 (known as TLANDO in the United States) to third parties outside the United States

and Canada, although no licensing agreement has been entered into by the Company. If and when an agreement is made with a partner, such

arrangement would likely be partially contingent upon obtaining local regulatory approval. No assurance can be given that any license

agreement will be completed, or, if an agreement is completed, that such an agreement would be on terms favorable to us.

LPCN

1144: An Oral Prodrug of Bioidentical Testosterone Product Candidate for the Treatment of NASH

We

are exploring the possibility of partnering LPCN 1144 to a third party, although no partnering agreement has been entered into by the

Company. No assurance can be given that any license agreement will be completed, or, if an agreement is completed, that such an agreement

would be on terms favorable to us.

Disease

Overview – NASH

NASH

is a more advanced state of non-alcoholic fatty liver disease (“NAFLD”) and can progress to a cirrhotic liver or liver failure,

require liver transplant, and can result in hepatocellular carcinoma/ liver cancer, and death. Progression of NASH to end stage liver

disease will soon surpass all other causes of liver failure requiring liver transplantation. Importantly, beyond these critical conditions,

NASH and NAFLD patients additionally suffer heightened cardiovascular risk and, in fact, die more frequently from cardiovascular events

than from liver disease. NAFLD/NASH is becoming more common due to its strong correlation with obesity and metabolic syndrome, including

components of metabolic syndrome such as diabetes, cardiovascular disease and high blood pressure. In the U.S., 20% to 30% of the population

is estimated to suffer from NAFLD and 15% to 20% percent of this group progress to NASH, which is a substantially large population that

lacks effective therapy. NASH is a silent killer that affects millions in the U.S. Diagnoses have been on the rise and are expected to

increase dramatically in the next decade. Approximately 50% of NASH patients are in adult males. In men, especially with comorbidities

associated with NAFLD/NASH, testosterone deficiency has been associated with an increased accumulation of visceral adipose tissue and

insulin resistance, which could be factors contributing to NAFLD/NASH. There is currently no approved therapy for the treatment of NASH

although there are several drug candidates currently under development with many having clinical failures to date.

The

critical pathophysiologic mechanisms underlying the development and progression of NASH include reduced ability to handle lipids, increased

insulin resistance, injury to hepatocytes and liver fibrosis in response to hepatocyte injury. NASH patients have an excessive accumulation

of fat in the liver resulting primarily from a caloric intake above and beyond energy needs. A healthy liver contains less than 5% fat,

but a liver in someone with NASH can contain more than 20% fat. This abnormal liver fat contributes to the progression to NASH, a liver

necro-inflammatory state that can lead to scarring, also known as fibrosis, and, for some, can progress to cirrhosis and liver failure.

Current

Status

We

have completed the LiFT Phase 2 clinical study in biopsy-confirmed non-cirrhotic NASH subjects. The LiFT clinical study

was a prospective, multi-center, randomized, double-blind, placebo-controlled multiple-arm study in biopsy-confirmed hypogonadal and

eugonadal male NASH subjects with grade F1-F3 fibrosis and a target NAFLD Activity Score ≥ 4 with a 36-week treatment period. The

LiFT clinical study enrolled 56 biopsy confirmed NASH male subjects. Subjects were randomized 1:1:1 to one of three arms (Treatment

A is a twice daily oral dose of 142 mg testosterone equivalent, Treatment B is a twice daily oral dose of 142 mg testosterone equivalent

formulated with 217 mg of d-alpha tocopherol equivalent, and the third arm is twice daily matching placebo).

The

primary endpoint of the LiFT clinical study was change in hepatic fat fraction via MRI-PDFF and exploratory liver

fat/marker end points post 12 weeks of treatment. Additionally, key secondary endpoints post 36 weeks of treatment included

assessment of histological change for NASH resolution and/or fibrosis improvement (biopsy) as well as liver fat data (MRI-PDFF). The LiFT

clinical study was not powered to assess statistical significance of any of the secondary endpoints. Other important endpoints

included the following: change in liver injury markers, anthropomorphic measurements, lipids, insulin resistance and

inflammatory/fibrosis markers; as well as patient reported outcomes.

Treatments

with LPCN 1144 post 12 weeks of treatment in the LiFT study resulted in robust liver fat reduction, assessed by MRI-PDFF, and

showed improvement of liver injury markers with no observed tolerability issues.

Liver

biopsies were performed at baseline (“BL”) and after 36 weeks of treatment (“EOS”). Prespecified biopsy analyses

included NASH Clinical Research Network (“CRN”) scoring as well as a continuous paired (“Paired Technique”) and

digital technique (“Digital Technique-Fibronest”). All biopsy analyses were performed on the same slides and the reads for

the 3 techniques were done independently. Analysis sets included the NASH Resolution Set (all subjects that have BL and EOS biopsy with

NASH at BL [NAS ≥4 with lobular inflammation score ≥ 1 and hepatocyte ballooning score ≥1 at BL] (n=37)), the Biopsy Set (all

subjects with baseline and EOS biopsies (n=44)), and the Safety Set (all randomized subjects (n=56)).

Both

LPCN 1144 treatment arms met with statistical significance the pre-specified accelerated approval regulatory endpoint of NASH resolution

with no worsening of fibrosis based on NASH CRN scoring. Additionally, both treatment arms showed substantial improvement of the observed

NASH activity in steatosis, inflammation, and ballooning.

During

the 36 weeks of treatment, LPCN 1144 was well tolerated with an overall safety profile comparable to placebo. Additionally, subjects

were given the option to have access to LPCN 1144 through an open label extension (“OLE”) study. The extension study enabled

the collection of additional data on LPCN 1144 for up to a total of 72 weeks of therapy, as well as data for 36 weeks of therapy for

those subjects on placebo in the LiFT study. Key results from the OLE study are as follows:

● Observed liver histology improvements support further development

In

November 2021, the FDA granted Fast Track Designation to LPCN 1144 as a treatment for non-cirrhotic NASH. The Fast Track program is designed

to accelerate the development and expedite the review of products, such as LPCN 1144, which are intended to treat serious diseases and

for which there is an unmet medical need.

We

had a written only response from FDA for a LPCN 1144 Type C meeting with the FDA in January 2022 to discuss the development path forward

with LPCN 1144. The FDA acknowledged that the NDA submission of LPCN 1144 would be via 505(b)2 regulatory pathway and agreed that no

additional non-clinical studies are needed to support an NDA submission. The FDA acknowledged that in the LiFT study subjects achieved

improvements in key components associated with NASH histopathology after 36-weeks of treatment with LPCN 1144 in adult males and agreed

that the proposed multicomponent primary surrogate endpoint is acceptable for seeking approval under the accelerated approval pathway.

The FDA agreed that the proposed primary multicomponent surrogate endpoint, NASH resolution with no worsening of fibrosis, is acceptable

for seeking approval under the accelerated approval pathway and the FDA recommended a Phase 3 trial with a study duration of 72 weeks.

In July 2022, Lipocine held an End of Phase 2 meeting with FDA for LPCN 1144 in NASH. The FDA recommended a Phase 2 dose ranging study

be conducted to identify the optimal dose prior to conducting a pivotal study. The FDA agreed to the proposed unique testosterone ester,

testosterone laurate, for future clinical studies.

LPCN

1111: A Next-Generation Long-Acting Oral Product Candidate for TRT

As

previously described, under the terms of the Verity License Agreement, we have licensed the development and commercialization rights

to LPCN 1111 (TLANDO XR) in the U.S. and Canada to Verity. We will continue to explore the possibility of partnering LPCN 1111 with

third parties outside the United States and Canada, although no partnering agreement has been entered into by the Company. No

assurance can be given that any license agreement outside North America will be completed, or, if an agreement is completed, that

such an agreement would be on terms favorable to us.

LPCN

1111 is a next-generation, novel ester prodrug of testosterone comprised of testosterone tridecanoate (“TT”) which uses our

proprietary delivery technology to enhance solubility and improve systemic absorption. We completed a Phase 2b dose finding study in

hypogonadal men in the third quarter of 2016. The primary objectives of the Phase 2b clinical study were to determine the starting Phase

3 dose of LPCN 1111 along with safety and tolerability of LPCN 1111 and its metabolites following oral administration of single and multiple

doses in hypogonadal men. Good dose-response relationship was observed over the tested dose range in the Phase 2b study. Additionally,

the target Phase 3 dose met primary and secondary end points. Overall, LPCN 1111 was well tolerated with no drug-related severe or serious

adverse events reported in the Phase 2b study. All future development and commercialization of LPCN 1111 in the U.S. and Canada will be the responsibility of our

Licensee, Verity.

LPCN

1107: An Oral Product Candidate for the Prevention of Preterm Birth

We

are exploring the possibility of partnering LPCN 1107 to a third party, although no partnering agreement has been entered into by the

Company. No assurance can be given that any partnership agreement will be completed, or, if an agreement is completed, that such an agreement

would be on terms favorable to us.

We

believe LPCN 1107 has the potential to become the first oral hydroxyprogesterone caproate (“HPC”) product indicated for the

reduction of risk of PTB (delivery less than 37 weeks) in women with singleton pregnancy who have a history of singleton spontaneous

PTB. Prevention of PTB is a significant unmet need as approximately 11% of all U.S. pregnancies result in PTB, a leading cause of neonatal

mortality and morbidity.

Current

Status

We

have completed a multi-dose PK dose selection study in pregnant women. The objective of the multi-dose PK selection study was to assess

HPC blood levels in order to identify the appropriate LPCN 1107 Phase 3 dose. The multi-dose PK dose selection study was an open-label,

4-period, 4-treatment, randomized, single and multiple dose PK study in pregnant women with 3 dose levels of LPCN 1107 and the IM HPC

(Makena®). The study enrolled 12 healthy pregnant women (average age of 27 years) with a gestational age of approximately 16 to 19

weeks. Subjects received three dose levels of LPCN 1107 (400 mg BID, 600 mg BID, or 800 mg BID) in a randomized, crossover manner during

the first 3 treatment periods and then received 5 weekly injections of HPC during the fourth treatment period. During each of the LPCN

1107 treatment periods, subjects received a single dose of LPCN 1107 on Day 1 followed by twice daily administration from Day 2 to Day

8. Following completion of the 3 LPCN 1107 treatment periods and a washout period, all subjects received 5 weekly injections of HPC.

Results from this study demonstrated that average steady state HPC levels (Cavg0-24) were comparable or higher for all 3 LPCN 1107 doses

than for injectable HPC. Additionally, HPC levels as a function of daily dose were linear for the 3 LPCN 1107 doses. Also, unlike the

injectable HPC, steady state exposure was achieved for all 3 LPCN 1107 doses within 7 days.

A

traditional PK/PD based Phase 2 clinical study in the intended patient population is not expected to be required prior to entering into

Phase 3. Therefore, based on the results of our multi-dose PK study we had an End-of-Phase 2 meeting and subsequent guidance meetings

with the FDA to define a pivotal Phase 2b/3 development plan for LPCN 1107. However, these discussions may be updated based on recent

developments with Covis’ Makena® as described below. We have completed a food effect study to characterize the dosing regimen

for the pivotal study. We plan to submit a pivotal clinical study protocol to the FDA.

The

FDA has granted orphan drug designation to LPCN 1107 based on a major contribution to patient care. Orphan designation qualifies Lipocine

for various development incentives, including tax credits for qualified clinical testing, and a waiver of the prescription drug user

fee when we file our NDA.

Recent

Competition Update

On

October 5, 2020, the FDA’s Center for Drug Evaluation and Research (“CDER”) proposed that Makena be withdrawn from

the market because the PROLONG trial failed to verify the clinical benefit of Makena and concluded that the available evidence does not

show Makena is effective for its approved use.

The

CDER issued AMAG Pharmaceuticals, the NDA holder at the time, a Notice of Opportunity for Hearing (“NOOH”) to withdraw approval

of Makena, for which AMAG Pharmaceuticals responded by requesting a hearing and providing detail on the company’s position, recognizing

clinicians’ decade-long use of treatment with Makena and the public health implications of withdrawing approval. The FDA Commissioner

held a public hearing with Covis October 17 through 19, 2022, which resulted in a 14-1 vote recommending removal of the product from

the market. On October 31, 2022, Covis approached the CDER and outlined a plan of orderly withdrawal which would set a withdrawal timeframe

sufficient for current patients to complete their courses of treatment. The CDER declined this proposal. On March 6, 2023, Covis announced

its plan to voluntarily withdraw Makena from the market and submitted a request to the CDER for a minimum 21-week wind-down. On April

6, 2023, the FDA withdrew its approval of Makena and ordered the immediate withdrawal of Makena and several approved generic versions

of the drug, making it unlawful for the drug to be distributed in the US. The FDA stated that in light of the unmet need for a treatment

for preventing preterm birth and improving neonatal outcomes, it is imperative that the medical and scientific communities increase their

efforts to find effective treatments and stated their hope that the decision to withdraw Makena will help galvanize further research.

The FDA further stated their commitment to working together with patients, researchers, and drug developers to advance the development

of safe and effective therapies that are urgently needed as a treatment for the prevention of preterm birth.

Research

and Development

As

disclosed in our development pipeline, we continue to build a diversified multi-asset pipeline of novel therapies. In 2023 and 2022,

we spent $10.2 million and $8.6 million, respectively, on research and development.

Competition

Neuroactive

Steroids Market overview

The

unique potential mechanism of action (“MOA”) of NAS presents an opportunity to treat a variety of CNS disorders. Accordingly,

multiple NAS as GABAA receptor PAMs are in active development for varied indications. Some companies engaged in development

include SAGE Therapeutics, Inc., Marinus Pharmaceuticals, Praxis Precision Medicines, and Eliem Therapeutics.

Postpartum

Depression

SAGE

Therapeutics is currently marketing an injectable version of an endogenous neuroactive steroid, brexanolone, under the tradename of ZULRESSOTM, for treatment in postpartum depression (“PPD”). In August

2023, the FDA approved ZURZUVAE (zuranolone) as an oral, once-daily, 14-day treatment for PPD. ZURZUVAE became commercially available

in December 2023.

Cirrhosis

Market Overview

Decompensated

cirrhosis patients with sarcopenia exhibit significantly shorter overall survival than those without sarcopenia. There are no therapies

specifically approved for sarcopenia or decompensated cirrhosis. Currently, the only curative therapy for decompensated cirrhosis is

liver transplant; however, liver transplantation is very costly, limited by the supply of available donors, and has a high risk of post-operative

complications.

Xifaxan®

(rifaximin) is the only FDA-approved medicine indicated for the reduction in risk of overt hepatic encephalopathy (HE) recurrence in

adults, a decompensation event typically associated with liver cirrhosis.

Currently,

there are no FDA approved drugs to treat secondary sarcopenia in decompensated cirrhosis beyond treatment of the underlying conditions.

Lipocine is a leader in pursuing treatment for subjects with decompensated cirrhosis with sarcopenia, however, there are candidates known

to be under development for cirrhosis related indication(s).

GB

1211 (by Galecto), an oral galectin-3 inhibitor for advanced liver cirrhosis targeted for directly addressing fibrosis, targeted for

initiation of a long-term cirrhosis trial in the first half of 2024, is in development being assessed in patients with moderate-to-severe

cirrhosis (Child-Pugh classes B and C).

Reformulated

Rifaximin SSD (by BAUSCH health) is in a Phase 3 study for Reduction of Early Decompensation in Cirrhosis with time to first occurrence

of hepatic encephalopathy as the primary endpoint. Reportedly, a new drug application (“NDA”) is planned to be submitted

2026.

Testosterone

Replacement Therapy Market Overview

The

gel-based testosterone replacement products that are currently available include AbbVie’s AndroGel®, Lilly’s Axiron®

Topical Solution and Endo’s Testim® and Fortesta® along with their respective authorized generics as well as the

equivalent generic versions of each. Transdermal patches include Allergan’s Androderm®. Intramuscular forms of testosterone

also exist although commercialized mostly in generic forms by multiple companies and in branded form as Aveed® by Endo. Additionally,

Endo markets the buccal testosterone replacement therapy Striant® and the Testopel® implantable testosterone pellets, which it

acquired from Auxillium in 2015. Antares Pharma, Inc. markets a sub-cutaneous weekly auto-injector testosterone therapy, Xyosted®.

Acerus Pharmaceuticals markets an intranasal testosterone therapy, NATESTO®. Finally, Tolmar Pharmaceuticals markets an oral TRT,

JATENZO®, which received FDA approval in March 2019 and Marius Pharmaceuticals markets an oral TU, KYZATREX®,

which received FDA approval for treatment of those with Klinefelter’s Syndrome on August 22, 2022.

Currently,

intramuscular injections have the highest market share in the testosterone replacement market in terms of annual prescriptions. While

gels are also a widely used form of TRT, there is a risk of transference; additionally, the gels are messy to apply and have significant

compliance issues leading to high rates of discontinuance among patients. Additionally, certain intramuscular injections have the potential

to cause pulmonary embolisms as well as cause injection site reactions, scarring, pain and risk of infection in patients. We believe

a safe and effective oral therapy could potentially increase patient convenience and compliance, while eliminating the testosterone transference