UNITED STATES

Amendment No. 2

Barrier Therapeutics, Inc.

600 College Road East, Suite 3200

Geert Cauwenbergh, Ph.D.

Copies to:

     Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement is declared effective.

     If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.    o

     If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o                            

     If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o                            

     If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o                            

     If delivery of the Prospectus is expected to be made pursuant to Rule 434, check the following box.    o

     The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to such Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any state where the offer is not permitted.

PROSPECTUS (Subject to Completion)

4,000,000 Shares

COMMON STOCK

Barrier Therapeutics, Inc. is offering 2,000,000 shares, and the selling stockholders are offering 2,000,000 shares. None of our executive officers is a selling stockholder.

Our common stock is listed on the NASDAQ National Market under the symbol “BTRX.” On January 31, 2005, the reported last sale price of our common stock on the NASDAQ National Market was $19.98 per share.

Investing in our common stock involves risks. See “Risk Factors” beginning on page 7.

PRICE $            A SHARE

We have granted the underwriters the right to purchase up to an additional 600,000 shares to cover over-allotments.

The Securities and Exchange Commission and state securities regulators have not approved or disapproved these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Morgan Stanley & Co. Incorporated expects to deliver the shares to purchasers on                     , 2005.

MORGAN STANLEY

                    , 2005

TABLE OF CONTENTS

      You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information different from the information contained in this prospectus. We and the selling stockholders are offering to sell shares of common stock, and seeking offers to buy shares of common stock, only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of when this prospectus is delivered or when any sale of our common stock occurs.

      For investors outside the United States: Neither we, the selling stockholders nor any of the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. You are required to inform yourselves about and to observe any restrictions relating to this offering and the distribution of this prospectus.

PROSPECTUS SUMMARY

      This summary does not contain all of the information you should consider before buying shares of our common stock. You should read the entire prospectus carefully, especially the “Risk Factors” section and our consolidated financial statements and the related notes appearing at the end of this prospectus, before deciding to invest in shares of our common stock.

BARRIER THERAPEUTICS, INC.

      We are a pharmaceutical company focused on the discovery, development and commercialization of pharmaceutical products in the field of dermatology. Our goal is to develop a portfolio of innovative products that address major medical needs in the treatment of dermatological diseases and disorders. We currently have multiple product candidates in clinical development based on intellectual property that we have licensed from third parties. We believe that there exists significant commercial opportunity for a company focused specifically on the treatment of dermatological diseases, given the relatively fragmented nature of the dermatology market and the clinical limitations of currently approved treatments. We plan to build our own sales force to market our product candidates that receive marketing approval directly to dermatologists and other target physicians in the United States and Canada and to rely on third-party arrangements for the commercialization of our approved product candidates outside the United States and Canada.

Our Product Development Pipeline

      Our product pipeline includes eight product candidates in various stages of clinical development. We also have product candidates in preclinical development, as well as two product candidates that are marketed by third parties in some countries outside the United States and Europe. In addition, we have access to the classes of compounds claimed in the patents licensed to us under our license agreements with affiliates of Johnson & Johnson. We are currently conducting a screening program to search for new product candidates in the field of dermatology. The United States Food and Drug Administration, or FDA, has not approved any of our product candidates.

      Our four most advanced product candidates are:

      Zimycan. Zimycan is a topical ointment for the treatment of infants with diaper dermatitis complicated by candidiasis, an inflammatory disease characterized by diaper rash complicated with an infection by a fungus called Candida. In the United States, there currently is no prescription drug specifically approved to treat diaper dermatitis complicated by candidiasis. On the basis of the positive Phase 3 pivotal clinical trial results that we announced in August 2004, we filed an amendment to a pending new drug application, or NDA, for Zimycan in the United States in November 2004. We expect to receive a first action letter from the FDA relating to the potential approval of Zimycan in the United States during the first half of 2005. Zimycan has received marketing approval from the Belgian Health Authorities and is the subject of a mutual recognition procedure for approval in major markets in Europe.

      Sebazole. Sebazole is a topical formulation of 2.0% ketoconazole, an antifungal agent, in a waterless gel that we are developing for the once daily treatment of seborrheic dermatitis, a type of eczema characterized by inflammation and scaling of the skin, principally of the scalp, face and chest. The condition ofter recurs, thereby requiring treatment over time. We have designed Sebazole to deliver the benefits of ketoconazole with the advantages of our waterless gel. In December 2004, we announced positive results from a Phase 3 pivotal clinical trial for Sebazole. We expect to file an NDA for Sebazole in the United States in the third quarter of 2005.

      Hyphanox. Hyphanox is an oral formulation of itraconazole, an antifungal agent, that we are developing for the treatment of fungal infections, including vaginal candidiasis, commonly known as vaginal yeast infection, and onychomycosis, commonly known as nail fungus. In the first quarter of 2004, we commenced a Phase 3 pivotal clinical trial in the United States for the use of a single day, single dose treatment of two 200 mg tablets of Hyphanox in the treatment of vaginal candidiasis. If this clinical trial is successful, we

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      Liarozole. Liarozole is our first product candidate based on a class of molecules known as retinoic acid metabolism blocking agents, or RAMBAs. We are developing Liarozole as an oral therapeutic for the treatment of congenital ichthyosis. Congenital ichthyosis is a rare genetic disease affecting one in 6,000 people in the United States, characterized by dryness and scaling of the skin. There is no prescription drug currently approved in the United States that is indicated for the treatment of congenital ichthyosis. Both the FDA and the Commission for the European Community have granted Liarozole orphan drug status for the treatment of congenital ichthyosis. We expect to commence a Phase 2/3 clinical trial for Liarozole for the treatment of congenital ichthyosis during 2005.

      Our product development pipeline includes four product candidates that are in earlier stages of clinical development — oral Rambazole, topical Rambazole, Azoline and Hivenyl. All of these product candidates are based on intellectual property licensed by us under our principal license agreements. We are developing these product candidates as treatments for a wide range of dermatological diseases and disorders, including acne, psoriasis and fungal infections.

      Rambazole. Rambazole is our second product candidate based on the RAMBA class of molecules. We believe that Rambazole may address some of the limitations of existing therapies, such as toxicity, or the degree to which existing therapies are harmful at certain levels of treatment, and immune suppression, or the tendency of some existing therapies to compromise a patient’s immune system. Studies conducted prior to our acquisition of rights to this product candidate suggested that Rambazole is more selective and more active than first generation RAMBA-based product candidates. We are currently developing oral and topical formulations of Rambazole.

	Oral. We are developing an oral formulation of Rambazole for the treatment of psoriasis and severe acne. An oral formulation of Rambazole was tested in two Phase 1 clinical trials. One of these clinical trials was a single dose escalation study, and the other was a multiple dose escalation study. In the multiple dose escalation study, increased doses of Rambazole resulted in increased manifestation of skin effects typical for retinoid therapy, including dry lips and skin. We are currently conducting two Phase 2a clinical studies in Europe using oral Rambazole, one in moderate to severe psoriasis and the other in moderate to severe nodular acne. Based on our review of initial data from the psoriasis trial, we plan to submit an investigational new drug application, or IND, to the FDA and commence Phase 2b clinical trials in the United States of oral Rambazole for psoriasis during the first half of 2005.
	Topical. We are developing a topical formulation of Rambazole for dermatological indications, including common forms of acne and mild to moderate psoriasis. Animal studies conducted with RAMBAs indicate that topical RAMBA treatment may produce the same therapeutic results as retinoic acid treatments but with less irritation. A Phase 2 clinical trial for acne compared 13 subjects treated with a topical formulation of Rambazole to 13 subjects treated with a placebo. Subjects were treated for 12 weeks. In this trial, subjects receiving topical Rambazole showed a greater percentage reduction of acne lesions than those receiving the placebo. In addition, topical Rambazole was well tolerated, with no serious drug-related adverse events reported. In 2005, we plan to initiate a Phase 2a clinical trial in Europe to evaluate the effectiveness of topical Rambazole in mild to moderate acne.

      Azoline. Azoline is an antifungal agent that we are developing as an oral treatment for skin and mucosal fungal infections. Preclinical testing has shown Azoline to be more potent than itraconazole against

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      Hivenyl. Hivenyl is an antihistamine that we are developing as an oral treatment for allergic reactions of the skin, such as the types of reactions associated with hives and those associated with poison ivy, which may not cause sedation typically associated with antihistamines. Patients experience sedation when an antihistamine crosses the blood-brain barrier. In preclinical studies in animal models, Hivenyl did not cross the blood-brain barrier. In addition, the results of two dose escalation Phase 1 clinical trials of Hivenyl suggest that Hivenyl inhibits allergic reactions, has a fast onset of action and does not cause sedation. In these trials, no cardiovascular side effects or sedation were experienced at doses of five to 15 times those that elicited an antihistamine response. We are currently conducting a Phase 2a clinical trial in Europe for Hivenyl.

      The preliminary observations of efficacy from any of our preclinical or clinical trials for our earlier stage product candidates are not necessarily indicative of the results that may be demonstrated in future clinical trials. We will need to conduct significant additional preclinical or clinical trials prior to seeking marketing approval for our earlier stage product candidates.

Recent Developments

      On February 5, 2005, we acquired the United States and Canadian rights to SOLAGÉ, a product commonly used for depigmenting lesions, from Moreland Enterprises Limited. In the United States, SOLAGÉ is indicated for the treatment of solar lentigines, commonly known as age spots, while the Canadian indication also includes use for related hyperpigmented lesions. Under the terms of the agreement, we made an initial cash payment to Moreland of $3 million and may make future payments totaling up to an additional $2 million, depending upon future sales of the product. In addition, the agreement provides that in the event Moreland proposes to grant rights to a third party to distribute, license or otherwise divest its rights to the product outside the United States and Canada, subject to the terms of the agreement, we have a right of first refusal to acquire such rights. The agreement also provides for the assignment to us of all SOLAGÉ United States and Canadian marketing authorizations, patents, patent applications and trademarks and the purchase by us of all existing inventory. The patent rights include United States and Canadian patents and patent applications covering SOLAGÉ’s pharmaceutical composition and methods of use until at least 2010. We have also entered into a distribution agreement with Galderma Laboratories under which Galderma will provide us with distribution services and logistical support for SOLAGÉ through December 2005.

Our Business Strategy

      Our strategy is to develop a portfolio of innovative products that address major medical needs in the treatment of dermatological diseases and disorders in order to become a global leader in the discovery, development and commercialization of prescription pharmaceutical products to treat these diseases and disorders. To achieve our goal, we intend to:

	•	aggressively pursue the development and regulatory approval of our product candidates;
	•	commercialize our products directly through our own sales organization in the United States and Canada and through collaborations with third parties outside the United States and Canada;
	•	maintain a diverse portfolio of product candidates; and
	•	expand our product portfolio through a combination of internal development efforts and selective acquisitions of additional compounds and marketed products.

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Johnson & Johnson License Agreements

      We were founded in 2001 by Geert Cauwenbergh, Ph.D., our Chief Executive Officer, who identified a portfolio of dermatological product candidates and intellectual property within the Johnson & Johnson family of companies that he believed could form the basis for an independent pharmaceutical company focused on dermatology. In May 2002, we acquired these assets through licenses from Janssen Pharmaceutica Products, L.P., Johnson & Johnson Consumer Companies, Inc. and Ortho-McNeil Pharmaceutical, Inc., each a Johnson & Johnson company, in exchange for an equity interest in us. In September 2004, we amended these two intellectual property transfer and license agreements to principally provide for additional semi-exclusive territories.

Early-Stage Company

      We have a limited operating history, have not completed the development of any of our product candidates and have not yet received marketing authorization for any of our product candidates, except for Zimycan in Belgium. We have not been profitable in any quarter since inception. For the year ended December 31, 2003, our net loss was $20.2 million and, as of that date, we had a deficit accumulated during the development stage of $61.9 million. For the nine months ended September 30, 2004, our net loss was $26.4 million and, as of that date, our deficit accumulated during the development stage was $92.9 million. Even if we succeed in developing and commercializing one or more of our product candidates, we may never generate sufficient sales revenue to achieve and then maintain profitability. We expect to incur operating losses for the foreseeable future.

      We were incorporated under the laws of the State of Delaware in September 2001 as “Barrier Health Technologies, Inc.” We changed our name to “Barrier Therapeutics, Inc.” in April 2002. Our principal executive offices are located at 600 College Road East, Suite 3200, Princeton, New Jersey 08540. Our telephone number is (609) 945-1200. Our website address is www.barriertherapeutics.com. The information on our website is not a part of this prospectus. We have included our website address in this document as an inactive textual reference only.

      We are seeking United States trademark registrations for our proposed trademarks Barrier Therapeutics^TM, Zimycan^TM, Sebazole^TM, Hyphanox^TM, Rambazole^TM and Hivenyl^TM. Liarozole, Azoline and Atopik are temporary designations. We are developing commercial names for our Liarozole, Azoline and Atopik product candidates. In connection with our acquisition of the SOLAGÉ® product, we acquired the rights to the United States and Canadian trademark registrations for SOLAGÉ® Topical Solution.

      In this prospectus, the information attributed to IMS Health is based on our independent analysis of the data provided to us from IMS Health. In addition, our citations in this prospectus to “Fitzpatrick’s” refer to Fitzpatrick’s Dermatology in General Medicine (Sixth Edition), a widely used reference book in the field of dermatology.

      In this prospectus, unless otherwise stated or the context otherwise requires, references to “Barrier,” “we,” “us,” “our” and similar references refer to Barrier Therapeutics, Inc.

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THE OFFERING

      The number of shares of our common stock that will be outstanding after this offering is based on 21,894,830 shares of common stock outstanding as of December 31, 2004. This amount excludes:

	•	1,438,937 shares of common stock issuable upon exercise of stock options outstanding as of December 31, 2004 at a weighted average exercise price of $4.52 per share, of which, options to purchase 383,586 shares were exercisable; and
	•	381,181 shares of common stock available for future grant under our 2004 stock incentive plan as of December 31, 2004 and 195,950 shares of common stock available for purchase under our employee stock purchase plan.

      On January 1, 2005, pursuant to the terms of our 2004 stock incentive plan and our employee stock purchase plan, an additional 1,000,000 shares of common stock became available for future grant under our 2004 stock incentive plan and an additional 109,474 shares of common stock became available for purchase under our employee stock purchase plan.

      Unless otherwise indicated, all information in this prospectus assumes no exercise by the underwriters of their over-allotment option and no exercise of stock options after December 31, 2004.

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SUMMARY FINANCIAL DATA

      The following tables summarize our consolidated financial data. You should read the summary consolidated financial data together with our consolidated financial statements and the related notes appearing at the end of this prospectus, and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section and other financial information included in this prospectus.

      The as adjusted balance sheet data reflect our sale of 2,000,000 shares of common stock in this offering at an assumed public offering price of $19.98 per share, after deducting estimated underwriting discounts and commissions and offering expenses.

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RISK FACTORS

      An investment in our common stock involves a high degree of risk. You should consider carefully the risks and uncertainties described below and all other information contained in this prospectus before you decide whether to purchase our common stock.

Risks Related to Our Business

Risks Related to Our Financial Results and Need for Additional Financing

              We have incurred losses since inception and anticipate that we will continue to incur losses for the foreseeable future.

      Since our inception in September 2001, we have incurred significant operating losses and, as of September 30, 2004, we had a deficit accumulated during the development stage of $92.9 million. We have not yet completed the development of any of our product candidates, and none are ready for commercialization, except for Zimycan in Belgium. As a result, to date, we have generated no revenues from the sale of our products. We expect to continue to incur significant operating expenses and anticipate that our expenses may increase substantially in the foreseeable future as we:

	•	conduct clinical trials;
	•	conduct research and development on existing and new product candidates;
	•	seek regulatory approvals for our product candidates;
	•	commercialize our product candidates, if approved;
	•	hire additional clinical, scientific, sales and marketing and management personnel;
	•	add operational, financial and management information systems; and
	•	identify and in-license additional compounds or product candidates.

      We need to generate significant revenue to achieve profitability. Even if we succeed in developing and commercializing one or more of our product candidates, we may never generate sufficient sales revenue to achieve and then maintain profitability. We expect to incur operating losses for the foreseeable future.

              We will need substantial additional funding and may be unable to raise capital when needed, which would force us to delay, reduce or eliminate our product development programs or commercialization efforts.

      As of September 30, 2004, we had cash, cash equivalents and marketable securities of $100.6 million. We believe that the net proceeds to us from this offering, together with our existing cash resources and our interest on the aggregate of these funds, will be sufficient to meet our projected operating requirements through the end of 2006. We currently have no additional commitments or arrangements for any additional financing to fund the research and development and commercial launch of our product candidates. We will require additional funding in order to continue our research and development programs, including preclinical studies and clinical trials of our product candidates, pursue regulatory approvals for our product candidates, pursue the commercial launch of our product candidates and for general corporate purposes. Our future capital requirements will depend on many factors, including:

	•	the success of our development and commercialization of our product candidates;
	•	the scope and results of our clinical trials;
	•	advancement of other product candidates into clinical development;
	•	potential acquisition or in-licensing of other products or technologies;
	•	the timing of, and the costs involved in, obtaining regulatory approvals;

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	•	the costs of manufacturing activities;
	•	the costs of commercialization activities, including product marketing, sales and distribution and related working capital needs;
	•	the costs involved in preparing, filing, prosecuting, maintaining and enforcing patent claims and other intellectual property-related costs, including any possible litigation costs; and
	•	our ability to establish and maintain collaborative and other strategic arrangements.

      Adequate financing may not be available on terms acceptable to us, if at all. We may continue to seek additional capital through public or private equity offerings, debt financings or collaborative arrangements and licensing agreements.

      If we raise additional funds by issuing equity securities, our stockholders may experience dilution. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions such as incurring additional debt, making capital expenditures or declaring dividends. Any debt financing that we raise or additional equity we may sell may contain terms that are not favorable to us or our common stockholders. If we raise additional funds through collaboration and licensing arrangements with third parties, it will be necessary to relinquish some rights to our technologies or our product candidates or grant licenses on terms that may not be favorable to us.

      Lack of funding could adversely affect our ability to pursue our business. For example, if adequate funds are not available, we may be required to curtail significantly or eliminate one or more of our product development programs.

Risks Related to Development of Product Candidates

	We will not be able to commercialize our product candidates if our preclinical studies do not produce successful results or if our clinical trials do not demonstrate safety and efficacy in humans.

      We are currently not authorized to market any of our product candidates in any jurisdiction except for Zimycan in Belgium. We intend to market our products in the United States and in various other countries, and as a result, we will need to obtain separate regulatory approvals in most jurisdictions. Before obtaining regulatory approval for the sale of our product candidates, we must conduct extensive preclinical studies and clinical trials to demonstrate the safety and efficacy in humans of our product candidates. Preclinical studies and clinical trials are expensive, can take many years and have uncertain outcomes. In addition, the regulatory approval procedures vary among countries and additional testing may be required in some jurisdictions. Our success will depend on the success of our currently ongoing clinical trials and subsequent clinical trials that have not yet begun. It may take several years to complete the clinical trials of a product, and a failure of one or more of our clinical trials can occur at any stage of testing. We believe that the development of each of our product candidates involves significant risks at each stage of testing. If clinical trial difficulties and failures arise, our product candidates may never be approved for sale or become commercially viable. We do not believe that any of our product candidates have alternative uses if our current development activities are unsuccessful.

      There are a number of difficulties and risks associated with clinical trials. These difficulties and risks may result in the failure to receive regulatory approval to sell our product candidates or the inability to commercialize any of our product candidates. The possibility exists that:

	•	we may discover that a product candidate does not exhibit the expected therapeutic results in humans, may cause harmful side effects or have other unexpected characteristics that may delay or preclude regulatory approval or limit commercial use if approved;
	•	the results from early clinical trials may not be statistically significant or predictive of results that will be obtained from expanded, advanced clinical trials;
	•	institutional review boards or regulators, including the FDA, may hold, suspend or terminate our clinical research or the clinical trials of our product candidates for various reasons, including

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		noncompliance with regulatory requirements or if, in their opinion, the participating subjects are being exposed to unacceptable health risks;
	•	subjects may drop out of our clinical trials;
	•	our preclinical studies or clinical trials may produce negative, inconsistent or inconclusive results, and we may decide, or regulators may require us, to conduct additional preclinical studies or clinical trials; and
	•	the cost of our clinical trials may be greater than we currently anticipate.

      For example, in November 2003, we completed two Phase 3 clinical trials that were designed primarily to analyze the use of one of our proposed product candidates, Seboride, for the treatment of seborrheic dermatitis. We decided not to seek regulatory approval for Seboride because the results of these clinical trials did not exhibit the expected therapeutic results for that product candidate. Similarly, because our preclinical studies of Ecalcidene did not replicate the results of earlier third-party studies, the development of Ecalcidene may be delayed or discontinued. Furthermore, the costs of our Phase 3 clinical trial for Hyphanox in the treatment of vaginal candidiasis were higher than expected principally because of the need to recruit additional patients, to add additional sites and to hire an additional contract research organization to assist in the management of the trial.

      With respect to a number of our product candidates, we expect to rely on the results of clinical trials that were performed by or on behalf of Janssen Pharmaceutica Products, L.P. and its affiliates prior to our acquisition of these product candidates. It is possible that these trial results may not be predictive of the results of the clinical trials that we conduct for our product candidates. In addition, the results of these prior clinical trials may not be acceptable to the FDA or similar foreign regulatory authorities because the data may be incomplete, outdated or not otherwise acceptable for inclusion in our submissions for regulatory approval. For example, although our product candidates ketanserin and oxatomide are marketed by other companies in some countries outside the United States and Europe, the data used to support the current regulatory approvals for these products do not meet current regulatory guidelines in the United States and Europe. As a result, we must repeat most of the clinical work already completed prior to filing for marketing approval in the United States and Europe for these product candidates.

      If we do not receive regulatory approval to sell our product candidates or cannot successfully commercialize our product candidates, we would not be able to generate any initial revenues or grow revenues in future periods, which would result in significant harm to our financial position and adversely impact our stock price.

	If our clinical trials for our product candidates are delayed, we would be unable to commercialize our product candidates on a timely basis, which would materially harm our business.

      Planned clinical trials may not begin on time or may need to be restructured after they have begun. Clinical trials can be delayed for a variety of reasons, including delays related to:

	•	obtaining an effective investigational new drug application, or IND, or regulatory approval to commence a clinical trial;
	•	negotiating acceptable clinical trial agreement terms with prospective trial sites;
	•	obtaining institutional review board approval to conduct a clinical trial at a prospective site;
	•	recruiting qualified subjects to participate in clinical trials;
	•	competition in recruiting clinical investigators;
	•	shortage or lack of availability of supplies of drugs for clinical trials;
	•	the need to repeat clinical trials as a result of inconclusive results or poorly executed testing;
	•	the placement of a clinical hold on a study;

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	•	the failure of third parties conducting and overseeing the operations of our clinical trials to perform their contractual or regulatory obligations in a timely fashion; and
	•	exposure of clinical trial subjects to unexpected and unacceptable health risks or noncompliance with regulatory requirements, which may result in suspension of the trial.

      For example, we completed enrollment of our Phase 3 clinical trial for Zimycan later than expected due to difficulties enrolling infants with proven diaper dermatitis complicated by candidiasis. In addition, in January 2005, the FDA informed us that we should submit the six-month data from our ongoing long-term safety study of our Sebazole product candidate at the time of the initial filing of the NDA. We expect that the request from the FDA to include this data will delay the filing of our Sebazole NDA until the third quarter of 2005 due to the time we expect it will take us to analyze data from the required number of patients. In January 2005, the FDA also asked us to perform a study for Sebazole known as a percutaneous absorbtion study, which measures the amount of a drug’s absorbtion, if any, into the bloodstream through the skin. The FDA requested that we submit data from this study at the time of the initial filing of the NDA. If satisfying either the long-term safety data or percutaneous absorbtion data requirements takes longer than we currently expect, the initial filing of our NDA for Sebazole could be delayed.

      We believe that our product candidates have significant milestones to reach, including, other than Zimycan, the successful completion of clinical trials, before commercialization. If we have significant delays in or termination of clinical trials, our financial results and the commercial prospects for our product candidates or any other products that we may develop will be adversely impacted. In addition, our product development costs would increase and our ability to generate revenue could be impaired.