CINV is a common and often debilitating side effect of cancer chemotherapy. According to the American Cancer Society, it is estimated that in January 2003 there were approximately 10.5 million people living in the United States with a history of cancer and over 1.4 million new cases are expected to be diagnosed in 2007. Chemotherapy is one of the most common treatments for cancer, and 70%-80% of all cancer patients who receive chemotherapy experience nausea and vomiting associated with their therapy. According to data published by IMS Health, sales for all marketed products in the United States used in treating CINV were approximately $2.7 billion in 2006. Due to the high prevalence of nausea and vomiting associated with chemotherapy, physicians typically offer a preventive anti-nausea agent prior to initiating chemotherapy. However, many patients fail to respond adequately to these conventional treatments.

Pain management is a large and rapidly growing area of pharmaceutical drug development. According to a November 2006 DataMonitor publication, nearly two-thirds of cancer patients in the United States experience pain associated with their disease, and almost two-thirds of those patients experience breakthrough cancer pain. According to IMS Health, U.S. sales for all drugs indicated for breakthrough cancer pain management totaled approximately $740 million in 2006.

Dronabinol RT capsule is a proprietary line extension of the Company’s Dronabinol HG capsule product candidate, and is part of its strategy of developing additional products by applying improved formulations to existing pharmaceutical compounds. The Company’s Dronabinol RT capsule product candidate includes an additive to stabilize the synthetic THC at room temperature.

Dronabinol RT syrup is a proprietary synthetic THC oral syrup formulation containing inactive ingredients to enhance and sustain absorption as well as provide flavor and color.

The Company plans to offer a nebulizer device that converts room temperature proprietary dronabinol solution into a fine mist for inhalation. The formulation is a liquid formulation of synthetic THC.

Fentanyl is an opioid analgesic approved in the United States for acute and chronic pain management. Depending upon the type of pain, physicians can prescribe fentanyl in three forms of administration: injectable, transmucosal, or delivery by diffusion through the mucous membranes of the mouth, and transdermal, or delivery through the skin. Fentanyl imitates natural biochemicals found in the body that moderate pain and block the transmission of pain signals that travel along nerves to the brain.

The Company’s other product candidates include other dronabinol line extensions and dronabinol combination products, fentanyl line extensions, analogs of morphine-6-O-sulfate and buprenorphine microspheres.

The Company plans to develop additional dronabinol delivery systems, including intravenous administration and suppository delivery of dronabinol.

Research and development expenses were approximately $4.4 million for the six months ended June 30, 2007, an increase of $1.0 million, or 29%, from approximately $3.4 million for the six months ended June 30, 2006.

Interest expense increased to approximately $0.7 million for the six months ended June 30, 2007, an increase of $0.4 million, or 133%, from approximately $0.3 million for the six months ended June 30, 2006.