REGENERX BIOPHARMACEUTICALS INC (Form: 10-Q, Received: 05/15/2015 15:15:08)

United States

Securities and Exchange Commission

Washington, DC 20549

FORM 10-Q

Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2015

Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ___________________ to __________________.

Commission file number 001-15070

RegeneRx Biopharmaceuticals, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware	52-1253406
(State of Incorporation)	(IRS Employer I.D. Number)

15245 Shady Grove Road

Suite 470

Rockville, Maryland 20850

(Address of Principal Executive Offices)

(301) 208-9191

(Registrant's Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ

No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “accelerated filer,” “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Securities Exchange Act of 1934. (Check one):

Large accelerated filer ¨		Accelerated filer ¨
Non-accelerated filer ¨		Smaller reporting company þ
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ

101,596,251 shares of common stock, par value $0.001 per share, were outstanding as of May 14, 2015.

RegeneRx Biopharmaceuticals, Inc.

Form 10-Q

Quarterly Period Ended March 31, 2015

Index

			Page No.
Part I.	Financial Information

	Item 1.	Condensed Financial Statements

		Condensed Balance Sheets at March 31, 2015 (unaudited) and December 31, 2014	3

		Condensed Statements of Operations for the three months ended March 31, 2015 and 2014 (unaudited)	4

		Condensed Statements of Cash Flows for the three months ended March 31, 2015 and 2014 (unaudited)	5

		Notes to Condensed Financial Statements (unaudited)	6-18

	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	19

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30

	Item 4	Controls and Procedures	30

Part II.	Other Information

	Item 1.	Legal Proceedings	31

	Item 1A.	Risk Factors	31

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	46

	Item 3.	Defaults Upon Senior Securities	46

	Item 4.	Mine Safety Disclosures	46

	Item 5.	Other Information	46

	Item 6.	Exhibits	47-49

	Signatures		50

Part I – Financial Information

Item 1. Condensed Financial Statements

RegeneRx Biopharmaceuticals, Inc.

Condensed Balance Sheets

	March 31,			December 31,
	2015			2014
	(Unaudited)			(See Note 1)
ASSETS
Current assets
Cash and cash equivalents	$	1,062,499		$	844,043
Prepaid expenses and other current assets		51,754			86,525
Total current assets		1,114,253			930,568
Property and equipment, net of accumulated depreciation of $86,300 and $121,727		11,962			12,871
Other assets		5,752			5,752
Total assets	$	1,131,967		$	949,191

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable	$	261,145		$	232,610
Accrued expenses		206,347			177,009
Total current liabilities		467,492			409,619

Long-Term liabilities
Unearned revenue		900,000			400,000
Convertible promisory note		300,000			300,000
Convertible promisory notes, net of derivative liability		296,309			266,021
Fair value of derivative liability		2,570,336			1,285,170
Total liabilities		4,534,137			2,660,810

Commitments and contingencies

Stockholders' deficit
Preferred stock, $.001 par value per share, 1,000,000 shares authorized; no shares issued		-			-

Common stock, par value $.001 per share, 200,000,000 shares authorized, 101,316,580 and 101,316,580 issued and outstanding		101,317			101,317
Additional paid-in capital		98,019,558			97,991,419
Accumulated deficit		(101,523,045	)		(99,804,355	)
Total stockholders' deficit		(3,402,170	)		(1,711,619	)
Total liabilities and stockholders' deficit	$	1,131,967		$	949,191

The accompanying notes are an integral part of these condensed financial statements.

RegeneRx Biopharmaceuticals, Inc.

Condensed Statements of Operations

	Three Months ended March 31,
	2015			2014
	(Unaudited)			(Unaudited)
Revenues	$	40,000		$	-

Operating expenses
Research and development		36,472			74,700
General and administrative		394,500			288,857
Total operating expenses		430,972			363,557
Loss from operations		(390,972	)		(363,557	)
Interest and other income		77			3
Interest expense		(42,629	)		(45,706	)
Change in fair value of derivative		(1,285,166	)		(1,715,834	)
Net loss	$	(1,718,690	)	$	(2,125,094	)

Basic and diluted net loss per common share	$	(0.02	)	$	(0.03	)
Weighted average number of common shares outstanding		101,316,580			82,233,247

The accompanying notes are an integral part of these condensed financial statements.

RegeneRx Biopharmaceuticals, Inc.

Condensed Statements of Cash Flows

	For the Three months ended March 31,
	2015			2014
	(Unaudited)			(Unaudited)

Operating activities:
Net loss	$	(1,718,690	)	$	(2,125,094	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		909			916
Share-based compensation		28,139			83,567
Non-cash interest expense		30,288			33,418
Change in fair value of derivative		1,285,166			1,715,834
Changes in operating assets and liabilities:
Unearned revenue		500,000			-
Prepaid expenses and other current assets		34,771			(23,095	)
Accounts payable		28,535			(27,364	)
Accrued expenses		29,338			80,440
Net cash provided by (used in) operating activities		218,456			(261,378	)

Financing activities:
Proceeds from sale of common stock and issuance of warrants		-			1,500,000
Proceeds from issuance of debt		-			55,000
Cash provided by financing activities		-			1,555,000

Net increase in cash and cash equivalents		218,456			1,293,622

Cash and cash equivalents at beginning of period		844,043			6,306
Cash and cash equivalents at end of period	$	1,062,499		$	1,299,928

Supplemental Disclosure of Non-Cash Operating and Financing Activities
Fair value of derivative liability at issuance	$	-		$	55,000

The accompanying notes are an integral part of these condensed financial statements.

RegeneRx Biopharmaceuticals, Inc.

Notes to Condensed Financial Statements

For the three months ended March 31, 2015 and 2014 (Unaudited)

organization, business overview and basis of presentation

Organization and Nature of Operations.

RegeneRx Biopharmaceuticals, Inc. (“RegeneRx”, the “Company”, “We”, “Us”, “Our”), a Delaware corporation, was incorporated in 1982. We are focused on the discovery and development of novel molecules to accelerate tissue and organ repair. Our operations are confined to one business segment: the development and marketing of product candidates based on Thymosin Beta 4 (“Tβ4”), an amino acid peptide.

Management Plans to Address Operating Conditions.

On January 28, 2015, we announced that we had entered into a Joint Venture Agreement (the “ Joint Venture Agreement ”) with G-treeBNT Co., Ltd., a Korean pharma company (“ G-treeBNT ”) and shareholder of the Company. The Joint Venture Agreement provides for the creation of an entity (the “ Joint Venture ” or “ReGenTree”), jointly owned by us and G-treeBNT, that will commercialize RGN-259 for treatment of dry eye and neurotrophic keratopathy, an orphan indication in the United States. G-treeBNT will be responsible for funding all product development and commercialization efforts, and holds a majority interest of ReGenTree that varies depending on development milestones achieved and eventual commercialization path, if successful. In conjunction with the Joint Venture Agreement, we also entered into a royalty-bearing license agreement (the “ License Agreement ”) with ReGenTree pursuant to which we granted to ReGenTree the right to develop and exclusively commercialize RGN-259 in the United States. We will receive a total of $1 million in two tranches under the terms of the License Agreement, the first tranche of $500,000 which was received in March 2015 and a second in the amount of $500,000, within forty-five business days after enrollment of the first patient in an ophthalmic trial in the U.S. We are also entitled to royalties as a percentage of net of sales ranging from the mid-single digits to the low-double digits based on the medical indications approved and whether the Joint Venture commercializes products directly or through a third party. RegeneRx possesses one of three board seats and certain major decisions within ReGenTree, such as commercialization strategy, mergers, acquisitions, require unanimous consent of the board. On March 9, 2015, RegeneRx announced that its joint venture partner and licensee, G-treeBNT, will receive $7.28 million to expand international development of its product candidate, RGN-259 (designated GBT-201 in Korea). The $7.28 million will be used for development of RGN-259/GBT-201 for dry eye syndrome and neurotrophic keratopathy (an orphan indication) in the U.S. through the U.S. joint venture, ReGenTree, LLC.

Currently, we have active partnerships in three major territories: the U.S., China and Pan Asia. Our partners have been moving forward and making significant progress in each territory and are prepared to initiate their clinical trials programs this year. In each case, the cost of development is being borne by our partners with no financial obligation for RegeneRx. Patient accrual, treatment, and follow-up for the ophthalmic trials are relatively fast, as opposed to most other clinical efforts, so data should be forthcoming in months, not years, after patients begin enrollment. We believe we should be able to maintain our existing operations at the current level while we await results from these trials and continue to seek additional partnership opportunities.

We still have significant clinical assets to develop, primarily RGN-352 (injectable formulation of Tβ4 for cardiac and CNS disorders) in the U.S., Pan Asia, and Europe, and RGN-259 in the EU. Our goal is to wait until the results are obtained from the current ophthalmic clinical trials before moving into the EU with RGN-259. If successful, this should allow us to obtain a higher value for the asset at that time. However, we intend to continue to develop RGN-352, either by obtaining grants to fund a Phase 2a clinical trial in the cardiovascular or central nervous system fields or finding a suitable partner with the resources and capabilities to develop it as we have with RGN-259.

We anticipate incurring additional losses in the future as we continue to explore the potential clinical benefits of Tβ4-based product candidates over multiple indications. We have entered into a series of strategic partnerships under licensing and joint venture agreements (see Note 7) where our partners are responsible to advance development of our product candidates with multiple clinical trials starting in 2015.

After extending the maturity date of our October 2012 Notes ($300,000 face value) until October 2017, we will need substantial additional funds if we wish to internally advance development of our unlicensed programs and to fund our operations for the twelve months subsequent to March 31, 2015. Accordingly, we will continue to evaluate opportunities to raise additional capital and are in the process of exploring various alternatives, including, without limitation, a public or private placement of our securities, debt financing, corporate collaboration and licensing arrangements, government grants, or the sale of our company or certain of our intellectual property rights.

These factors raise substantial doubt about our ability to continue as a going concern. The accompanying condensed financial statements have been prepared assuming that we will continue as a going concern. This basis of accounting contemplates the recovery of our assets and the satisfaction of our liabilities in the normal course of business.

Although we intend to continue to seek additional financing and additional strategic partners, we may not be able to complete a financing or corporate transaction, either on favorable terms or at all. If we are unable to complete a financing or strategic transaction, we may not be able to continue as a going concern after our funds have been exhausted, and we could be required to significantly curtail or cease operations, file for bankruptcy or liquidate and dissolve. There can be no assurance that we will be able to obtain any sources of funding. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should we be forced to take any such actions.

In order to operate as efficiently and effectively as possible, we continually refine our operating strategy and evaluate new ways to develop Tβ4. However, substantial additional resources will be needed before we will be able to achieve sustained profitability. Consequently, we continually evaluate alternative sources of financing such as the sharing of development costs through strategic collaboration agreements and grants. There can be no assurance that any future financing initiatives will be successful and, if we are not able to obtain sufficient levels of financing, it would delay certain clinical and/or research activities not currently funded by our partners and our financial condition would be materially and adversely affected. Even if we are able to obtain sufficient funding, other factors including competition, dependence on third parties, uncertainty regarding patents, protection of proprietary rights, manufacturing of peptides, and technology obsolescence could have a significant impact on us and our operations.

To achieve profitability we, and/or a partner, must successfully conduct pre-clinical studies and clinical trials, obtain required regulatory approvals and successfully manufacture and market those pharmaceuticals we wish to commercialize. The time required to reach profitability is highly uncertain, and there can be no assurance that we will be able to achieve sustained profitability, if at all.

Basis of Presentation.

The accompanying unaudited consolidated interim financial statements reflect, in the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of our financial position, results of operations and cash flows for each period presented. These statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and with the rules and regulations of the SEC, for interim financial statements. Accordingly, they do not include all of the information and footnotes required by GAAP. The accounting policies underlying our unaudited consolidated interim financial statements are consistent with those underlying our audited annual financial statements. These unaudited consolidated interim financial statements should be read in conjunction with the audited annual financial statements as of and for the year ended December 31, 2014, and related notes thereto, included in our Annual Report on Form 10-K for the year ended December 31, 2014 (the “Annual Report”).

The accompanying December 31, 2014 financial information was derived from our audited financial statements included in the Annual Report. Operating results for the three-month period ended March 31, 2015 are not necessarily indicative of the results to be expected for the year ending December 31, 2015 or any other future period.

References in this Quarterly Report on Form 10-Q to “authoritative guidance” are to the Accounting Standards Codification issued by the Financial Accounting Standards Board (“FASB”).

Use of Estimates.

The preparation of financial statements in conformity with accounting principles generally accepted in the United Stated of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Critical accounting policies involved in applying our accounting policies are those that require management to make assumptions about matters that are highly uncertain at the time the accounting estimate was made and those for which different estimates reasonably could have been used for the current period. Critical accounting estimates are also those which are reasonably likely to change from period to period, and would have a material impact on the presentation of our financial condition, changes in financial condition or results of operations. Our most critical accounting estimates relate to accounting policies for fair value measurements in connection with derivative liabilities, clinical trial accruals and share-based arrangements. Management bases its estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances. Actual results could differ from those estimates.

Convertible Notes with Detachable Warrants.

In accordance with Accounting Standards Codification (ASC) 470-20, Debt with Conversion and Other Options , the proceeds received from convertible notes are allocated between the convertible notes and the detachable warrants based on the relative fair value of the convertible notes without the warrants and the relative fair value of the warrants. The portion of the proceeds allocated to the warrants is recognized as additional paid-in capital and a debt discount. The debt discount related to warrants is accreted into interest expense through maturity of the notes.

Derivative Financial Instruments

Derivative financial instruments consist of financial instruments or other contracts that contain a notional amount and one or more underlying variables (e.g. interest rate, security price or other variable), which require no initial net investment and permit net settlement. Derivative financial instruments may be free-standing or embedded in other financial instruments. Further, derivative financial instruments are initially, and subsequently, measured at fair value and recorded as liabilities or, in rare instances, assets.

The Company does not use derivative financial instruments to hedge exposures to cash-flow, market or foreign-currency risks. However, the Company has issued financial instruments including warrants that are either (i) not afforded equity classification, (ii) embody risks not clearly and closely related to host contracts, or (iii) may be net-cash settled by the counterparty. In certain instances, these instruments are required to be carried as derivative liabilities, at fair value, in the Company’s financial statements. In other instances these instruments are classified as equity instruments in the Company’s financial statements.

The Company estimates the fair values of its derivative financial instrument using the Black-Scholes option pricing model because it embodies all of the requisite assumptions (including trading volatility, estimated terms and risk free rates) necessary to fair value these instruments. Estimating fair values of derivative financial instruments requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. In addition, option-based techniques are highly volatile and sensitive to changes in the trading market price of the Company’s common stock, which has a high-historical volatility. Since derivative financial instruments are initially and subsequently carried at fair values, the Company’s operating results reflect the volatility in these estimate and assumption changes in each reporting period.

Revenue Recognition.

We recognize revenue in accordance with the authoritative guidance for revenue recognition. We recognize revenue when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery (or passage of title) has occurred or services have been rendered, (iii) the seller's price to the buyer is fixed or determinable, and (iv) collectability is reasonably assured. We also comply with the authoritative guidance for revenue recognition regarding arrangements with multiple deliverables. Multiple-element arrangements are analyzed to determine whether the deliverables, which may include a license together with performance obligations such as providing a clinical supply of product and steering committee services, can be separated or whether they must be accounted for as a single unit of accounting. Revenue associated with licensing agreements consists of non-refundable upfront license fees and milestone payments. Non-refundable upfront license fees received under license agreements, whereby continued performance or future obligations are considered inconsequential to the relevant license technology, are recognized as revenue upon delivery of the technology.

Whenever we determine that an arrangement should be accounted for as a single unit of accounting, we must determine the period over which the performance obligations will be performed and revenue will be recognized. Revenue will be recognized using either a relative performance or straight-line method. We recognize revenue using the relative performance method provided that the we can reasonably estimate the level of effort required to complete our performance obligations under an arrangement and such performance obligations are provided on a best-efforts basis. Revenue recognized is limited to the lesser of the cumulative amount of payments received or the cumulative amount of revenue earned, as determined using the relative performance method, as of each reporting period.

If we cannot reasonably estimate the level of effort required to complete our performance obligations under an arrangement, the performance obligations are provided on a best-efforts basis and we can reasonably estimate when the performance obligation ceases or the remaining obligations become inconsequential and perfunctory, then the total payments under the arrangement, excluding royalties and payments contingent upon achievement of substantive milestones, would be recognized as revenue on a straight-line basis over the period we expect to complete our performance obligations. Revenue is limited to the lesser of the cumulative amount of payments received or the cumulative amount of revenue earned, as determined using the straight-line basis, as of the period ending date.

If we cannot reasonably estimate when our performance obligation either ceases or becomes inconsequential and perfunctory, then revenue is deferred until we can reasonably estimate when the performance obligation ceases or becomes inconsequential. Revenue is then recognized over the remaining estimated period of performance.

We recognize consideration that is contingent upon the achievement of a milestone in its entirety as revenue in the period in which the milestone is achieved only if the milestone is substantive in its entirety. A milestone is considered substantive when it meets all of the following criteria:

The consideration is commensurate with either the entity's performance to achieve the milestone or the enhancement of the value of the delivered item(s) as a result of a specific outcome resulting from the entity's performance to achieve the milestone;

The consideration relates solely to past performance; and

The consideration is reasonable relative to all of the deliverables and payment terms within the arrangement .

A milestone is defined as an event (i) that can only be achieved based in whole or in part on either the entity's performance or on the occurrence of a specific outcome resulting from the entity's performance, (ii) for which there is substantive uncertainty at the date the arrangement is entered into that the event will be achieved and (iii) that would result in additional payments being due to us.

Amounts received prior to satisfying the above revenue recognition criteria are recorded as deferred revenue in our accompanying balance sheets.

Variable Interest Entities

The Company has determined that the Joint Venture is a “variable interest entity”, since the total equity investment at risk is not sufficient to permit the Joint Venture to finance its activities without additional subordinated financial support.. Further, because of G-treeBNT’s majority equity stake in the Joint Venture, voting control, control of the board of directors, and substantive management rights, and given that the Company does not have the power to direct the Joint Venture’s activities that most significantly impact its economic performance, the Company determined that it is not the primary beneficiary of the Joint Venture and therefore is not required to consolidate the Joint Venture. The Company reports its equity stake in the Joint Venture using the equity method of accounting because, while it does not control the Joint Venture, the Company can exert significant influence over the Joint Ventures activities by virtue of its board representation.

Because the Company is not obligated to fund the Joint Venture, and has not provided any financial support to the Joint Venture, the carrying value of its investment in the Joint Venture is zero. As a result, the Company is not recognizing its share (49%) of the Joint Venture’s operating losses and will not recognize any such losses until the Joint Venture produces net income (as opposed to net losses) and at that point the Company will reduce its share of the Joint Venture’s net income by its share of previously suspended net losses. As of March 31, 2015, because it has not provided any financial support, the Company has no financial exposure as a result of its variable interest in the Joint Venture.

Research and Development .

Research and development (“R&D”) costs are expensed as incurred and include all of the wholly-allocable costs associated with our various clinical programs passed through to us by our outsourced vendors. Those costs include: manufacturing Tβ4; formulation of Tβ4 into the various product candidates; stability for both Tβ4 and the various formulations; pre-clinical toxicology; safety and pharmacokinetic studies; clinical trial management; medical oversight; laboratory evaluations; statistical data analysis; regulatory compliance; quality assurance; and other related activities. R&D includes cash and non-cash compensation, payroll taxes, travel and other miscellaneous costs of our internal R&D personnel, part-time hourly employees and external consultants dedicated to R&D efforts. R&D also includes a pro-ration of our common infrastructure costs for office space and communications.

Cost of Preclinical Studies and Clinical Trials .

We accrue estimated costs for preclinical studies based on estimates of work performed. We estimate expenses incurred for clinical trials that are in process based on patient enrollment and based on clinical data collection and management. Costs based on clinical data collection and management are recognized based on estimates of unbilled goods and services received in the reporting period. We monitor the progress of the trials and their related activities and adjust the accruals accordingly. Adjustments to accruals are charged to expense in the period in which the facts that give rise to the adjustment become known. In the event of early termination of a clinical trial, we would accrue an amount based on estimates of the remaining non-cancelable obligations associated with winding down the clinical trial.

Recent Accounting Pronouncements.

In August 2014, the FASB issued Accounting Standard Update (“ASU”) 2014-15, Presentation of Financial Statements – Going Concern . The new standard requires management to evaluate on a regular basis whether any conditions or events have arisen that could raise substantial doubt about the entity’s ability to continue as a going concern. The guidance 1) provides a definition for the term “substantial doubt,” 2) requires an evaluation every reporting period, interim periods included, 3) provides principles for considering the mitigating effect of management’s plans to alleviate the substantial doubt, 4) requires certain disclosures if the substantial doubt is alleviated as a result of management’s plans, 5) requires an express statement, as well as other disclosures, if the substantial doubt is not alleviated, and 6) requires an assessment period of one year from the date the financial statements are issued. The standard is effective for the Company’s reporting year beginning January 1, 2017 and early adoption is not permitted. The Company is currently evaluating the impact, if any, that this new accounting pronouncement will have on its financial statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which provides guidance for revenue recognition for contracts, superseding the previous revenue recognition requirements, along with most existing industry-specific guidance. The guidance requires an entity to review contracts in five steps: 1) identify the contract, 2) identify performance obligations, 3) determine the transaction price, 4) allocate the transaction price, and 5) recognize revenue. The new standard will result in enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue arising from contracts with customers. The standard is effective for the Company’s reporting year beginning January 1, 2017 and early adoption is not permitted. The Company is currently evaluating the impact, if any, that this new accounting pronouncement will have on its financial statements.

In April 2015, the FASB issued an accounting standards update amending the presentation of debt issuance costs. These costs will now be presented as a direct reduction from the carrying amount of that debt liability. The update is effective for financial statements issued for reporting periods beginning after December 15, 2015. This guidance should be applied on a retrospective basis with disclosures for a change in accounting principle applicable. The Company has not yet adopted this update and is currently evaluating the impact, if any, it may have on its financial condition and results of operations.

Net Loss per Common Share –

Net loss per common share for the three-month periods ended March 31, 2015 and 2014, respectively, is based on the weighted-average number of shares of common stock outstanding during the periods. Basic and diluted loss per share are identical for all periods presented as potentially dilutive securities have been excluded from the calculation of the diluted net loss per common share because the inclusion of such securities would be antidilutive. The potentially dilutive securities include 28,875,092 shares and 45,641,175 shares in 2015 and 2014, respectively, reserved for the conversion of convertible debt or exercise of outstanding options, warrants, including 13,833,333 related to G-treeBNT’s second equity purchase and related purchase option in 2014.

Stock-Based Compensation

We measure stock-based compensation expense based on the grant date fair value of the awards, which is then recognized over the period which service is required to be provided. We estimate the value of our stock option awards on the date of grant using the Black-Scholes option pricing model and amortize that cost over the expected term of the grant. We recognized $28,139 and $83,567 in stock-based compensation expense for the three months ended March 31, 2015 and 2014, respectively. We expect to recognize the compensation cost related to non-vested options as of March 31, 2015 of $79,411 over the weighted average remaining recognition period of 1.79 years.

We used the following forward-looking range of assumptions to value the 325,000 stock options granted to employees, consultants and directors during the three months ended March 31, 2015 and the 2,035,000 stock options granted to employees, consultants and directors during the three months ended March 31, 2014:

	2015			2014

Dividend yield		0.0	%		0.0	%
Risk-free rate of return		1.53	%		1.76	%
Expected life in years		4.75			4 - 5
Volatility		92	%		91-98%
Forfeiture rate		2.6	%		2.6	%

Income Taxes

As of March 31, 2015, there have been no material changes to our uncertain tax positions disclosures as provided in Note 9 of the Annual Report. The tax returns for all years in the Company’s major tax jurisdictions are not settled as of January 1, 2015; no changes in settled tax years have occurred through March 31, 2015. Due to the existence of tax attribute carryforwards (which are currently offset by a full valuation allowance), the Company treats all years’ tax positions as unsettled due to the taxing authorities’ ability to modify these attributes.

Fair Value Measurements

The authoritative guidance for fair value measurements defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or the most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact, and (iv) willing to transact. The guidance describes a fair value hierarchy based on the levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:

•

Level 1 — Quoted prices in active markets for identical assets and liabilities.

•

Level 2 — Observable inputs other than quoted prices in active markets for identical assets and liabilities.

•

Level 3 — Unobservable inputs.

As of March 31, 2015 and 2014, our only qualifying assets that required measurement under the foregoing fair value hierarchy were money market funds included in Cash and Cash Equivalents valued at $1,062,000 and $1,300,000, respectively, using Level 1 inputs. Our March 31, 2015 and December 31, 2014 balance sheets reflect qualifying liabilities resulting from the price protection provision in the convertible promissory notes issued in March, July and September of 2013 and January 2014 (see Note 6). We evaluated the derivative liability embedded in the series of convertible notes to determine if an adjustment to the carrying value of the liability was required at March 31, 2015 using the following assumptions.

	March 2013			July 2013			Sept 2013			Jan 2014

Dividend yield		0.00	%		0.00	%		0.00	%		0.00	%
Risk-free rate of return		1.02	%		1.02	%		1.02	%		1.02	%
Expected life in years		3			3.25			3.45			3.75
Volatility		102.4	%		100.3	%		103.4	%		99.7	%

Given the conditions surrounding the trading of the Company’s equity securities, the Company values its derivative instruments related to embedded conversion features from the issuance of convertible debentures in accordance with the Level 3 guidelines. For the period ended March 31, 2015, the following table reconciles the beginning and ending balances for financial instruments that are recognized at fair value in these financial statements.

	Balance at						Balance at
	December 31,		New		Change in		March 31,
	2014		Issuances		Fair Values		2015

Level 3 -
Derivative liabilities from:
Conversion features
March 2013	$	412,500	$	-	$	412,500	$	825,000
July 2013		183,334		-		183,333		366,667
September 2013		588,500		-		588,500		1,177,000
January 2014		100,836		-		100,833		201,669
Derivative instruments	$	1,285,170	$	-	$	1,285,166	$	2,570,336

Convertible Notes

2012 Convertible Note

On October 19, 2012 we completed a private placement of convertible notes (the “2012 Notes”) raising an aggregate of $300,000 in gross proceeds. The 2012 Notes were originally to mature after twenty-four (24) months from issuance. In order to conserve the Company’s capital, in October 2014 the Investors agreed to extend the maturity date to October 19, 2017, all other terms were unchanged. The 2012 Notes bear interest at a rate of five percent (5%) per annum and are convertible into shares of our common stock at a conversion price of fifteen cents ($0.15) per share (subject to adjustment as described in the 2012 Notes) at any time prior to repayment, at the election of the Investors. In the aggregate, the 2012 Notes are convertible into up to 2,000,000 shares of our common stock excluding interest.

At any time prior to maturity of the 2012 Notes, with the consent of the holders of a majority in interest of the 2012 Notes, we may prepay the outstanding principal amount of the 2012 Notes plus unpaid accrued interest without penalty. Upon the commission of any act of bankruptcy by the Company, the execution by the Company of a general assignment for the benefit of creditors, the filing by or against the Company of a petition in bankruptcy or any petition for relief under the federal bankruptcy act or the continuation of such petition without dismissal for a period of ninety (90) days or more, or the appointment of a receiver or trustee to take possession of the property or assets of the Company, the outstanding principal and all accrued interest on the 2012 Notes will accelerate and automatically become immediately due and payable.

In connection with the issuance of the 2012 Notes we also issued warrants to each Investor. The warrants are exercisable for an aggregate of 400,000 shares of common stock with an exercise price of fifteen cents ($0.15) per share for a period of five years. The relative fair value of the warrants issued is $27,097, calculated using the Black-Scholes-Merton valuation model value of $0.07 with an expected and contractual life of 5 years, an assumed volatility of 74.36%, and a risk-free interest rate of 0.77%. The warrants were recorded as additional paid-in-capital and a discount on the 2012 Notes of $27,097. Non-cash interest expense related to the debt discount during the three months ended March 31, 2014 totaled $3,341.

The Investors, and the principal amount of their respective 2012 Notes and number of shares of common stock issuable upon exercise of their respective warrants, are as set forth below:

Investor	Note Principal		Warrants
Sinaf S.A.	$	200,000		266,667
Joseph C. McNay	$	50,000		66,667
Allan L. Goldstein	$	35,000		46,666
J.J. Finkelstein	$	15,000		20,000

Sinaf S. A. is a direct wholly-owned subsidiary of Aptafin S.p.A., or Aptafin. Aptafin is owned directly by Paolo Cavazza and members of his family, who directly and indirectly own 38% of Sigma-Tau, our largest stockholder. The other Investors are members of our Board of Directors including Mr. Finkelstein who serves as our CEO and also the Chairman of our Board of Directors and Dr. Goldstein who also serves as our Chief Scientific Advisor.

In the fourth quarter of 2014, the Company amended the existing October 2012 convertible debt agreement with the lenders, solely to extend the due date of the principal and accrued unpaid until interest October 19, 2017. No other terms of the original debt were amended or modified, and the lenders did not reduce the borrowed amount or change the interest rate of the debt. The Company considered the restructuring a troubled debt restructuring as a result of the Company’s financial condition (see Note 1 discussion of “going concern”). At the date of the amendment, all existing debt discounts and deferred financing fees were fully amortized and the amendment did not involve any additional fees paid to the lender or third parties; as such there was no gain recognized as a result of the amendment.

2013 Convertible Notes

On March 29, 2013, we completed a private placement of convertible notes (the “March 2013 Notes”) raising an aggregate of $225,000 in gross proceeds. The March 2013 Notes bear interest at a rate of five percent (5%) per annum, mature sixty (60) months after their date of issuance and are convertible into shares of our common stock at a conversion price of six cents ($0.06) per share (subject to adjustment as described in the March 2013 Notes) at any time prior to repayment, at the election of the investor. In the aggregate, the March 2013 Notes are initially convertible into up to 3,750,000 shares of our common stock.

At any time prior to maturity of the March 2013 Notes, with the consent of the holders of a majority in interest of the March 2013 Notes, we may prepay the outstanding principal amount of the March 2013 Notes plus unpaid accrued interest without penalty. Upon the commission of any act of bankruptcy by the Company, the execution by the Company of a general assignment for the benefit of creditors, the filing by or against the Company of a petition in bankruptcy or any petition for relief under the Federal bankruptcy act or the continuation of such petition without dismissal for a period of ninety (90) days or more, or the appointment of a receiver or trustee to take possession of the property or assets of the Company, the outstanding principal and all accrued interest on the March 2013 Notes will accelerate and automatically become immediately due and payable.

The investors in the offering included two directors of the Company, Dr. Goldstein and Joseph C. McNay, an outside director. The principal amounts of their respective March 2013 Notes are as set forth below:

Investor	Note Principal
Joseph C. McNay	$	50,000
Allan L. Goldstein	$	25,000

The Company has evaluated the terms of the March 2013 Notes which contain a down round provision under which the conversion price could be decreased as a result of future equity offerings, as defined in the March 2013 Notes. The adjustment would reduce the conversion price of the March 2013 Notes to be equivalent to that of the newly issued stock or stock-related instruments. As a result, the Company concluded that the conversion feature represented an embedded conversion feature for accounting purposes and should be recognized as a derivative liability, requiring a mark-to-market adjustment at the end of each reporting period until the related March 2013 Notes have been settled. The bifurcated liability of $225,000 was recorded on the date of issuance which resulted in a residual debt value of $0. The discount related to the embedded feature will be accreted back to debt through the maturity of the notes.

On July 5, 2013, we completed a private placement of convertible notes (the “July 2013 Notes”) raising an aggregate of $100,000 in gross proceeds. The July 2013 Notes bear interest at a rate of five percent (5%) per annum, mature sixty (60) months after their date of issuance and are convertible into shares of our common stock at a conversion price of six cents ($0.06) per share (subject to adjustment as described in the July 2013 Notes) at any time prior to repayment, at the election of the investor. In the aggregate, the July 2013 Notes are initially convertible into up to 1,666,667 shares of our common stock.

At any time prior to maturity of the July 2013 Notes, with the consent of the holders of a majority in interest of the July 2013 Notes, we may prepay the outstanding principal amount of the July 2013 Notes plus unpaid accrued interest without penalty. Upon the commission of any act of bankruptcy by the Company, the execution by the Company of a general assignment for the benefit of creditors, the filing by or against the Company of a petition in bankruptcy or any petition for relief under the Federal bankruptcy act or the continuation of such petition without dismissal for a period of ninety (90) days or more, or the appointment of a receiver or trustee to take possession of the property or assets of the Company, the outstanding principal and all accrued interest on the July 2013 Notes will accelerate and automatically become immediately due and payable.

The investors in the offering included four directors of the Company, Mr. Finkelstein, Dr. Goldstein, Mr. McNay and L. Thompson Bowles, an outside director. The principal amounts of their respective July 2013 Notes are as set forth below:

Investor	Note Principal
Joseph C. McNay	$	50,000
Allan L. Goldstein	$	10,000
J.J. Finkelstein	$	5,000
L. Thompson Bowles	$	5,000

The Company has evaluated the terms of the July 2013 Notes which contain a down round provision under which the conversion price could be decreased as a result of future equity offerings, as defined in the July 2013 Notes. The adjustment would reduce the conversion price of the July 2013 Notes to be equivalent to that of the newly issued stock or stock-related instruments. As a result, the Company concluded that the conversion feature represented an embedded conversion feature for accounting purposes and should be recognized as a derivative liability, requiring a mark-to-market adjustment at the end of each reporting period until the related July 2013 Notes have been settled. The bifurcated liability of $66,667 was recorded on the date of issuance which resulted in a residual debt value of $33,333. The discount related to the embedded feature will be accreted back to debt through the maturity of the notes.

On September 11, 2013, we completed a private placement of convertible notes raising an aggregate of $321,000 in gross proceeds (the “September 2013 Notes”). The September 2013 Notes bear interest at a rate of five percent (5%) per annum, mature sixty (60) months after their date of issuance and are convertible into shares of our common stock at a conversion price of six cents ($0.06) per share (subject to adjustment as described in the September 2013 Notes) at any time prior to repayment, at the election of the investor. In the aggregate, the September 2013 Notes are initially convertible into up to 5,350,000 shares of our common stock.

At any time prior to maturity of the September 2013 Notes, with the consent of the holders of a majority in interest of the September 2013 Notes, we may prepay the outstanding principal amount of the September 2013 Notes plus unpaid accrued interest without penalty. Upon the commission of any act of bankruptcy by the Company, the execution by the Company of a general assignment for the benefit of creditors, the filing by or against the Company of a petition in bankruptcy or any petition for relief under the federal bankruptcy act or the continuation of such petition without dismissal for a period of ninety (90) days or more, or the appointment of a receiver or trustee to take possession of the property or assets of the Company, the outstanding principal and all accrued interest on the September 2013 Notes will accelerate and automatically become immediately due and payable.

The investors in the offering included an affiliate and four directors of the Company. The principal amounts of the affiliate and directors respective September 2013 Notes are as set forth below:

Investor	Note Principal
SINAF S.A.	$	150,000
Joseph C. McNay	$	100,000
Allan L. Goldstein	$	11,000
L. Thompson Bowles	$	5,000
R. Don Elsey	$	5,000

The Company has evaluated the terms of the September 2013 Notes which contain a down round provision under which the conversion price could be decreased as a result of future equity offerings, as defined in the September 2013 Notes. The adjustment would reduce the conversion price of the September 2013 Notes to be equivalent to that of the newly issued stock or stock-related instruments. As a result, the Company concluded that the conversion feature represented an embedded conversion feature for accounting purposes and should be recognized as a derivative liability, requiring a mark-to-market adjustment at the end of each reporting period until the related September 2013 Notes have been settled. The bifurcated liability of $267,500 was recorded on the date of issuance which resulted in a residual debt value of $53,500. The discount related to the embedded feature will be accreted back to debt through the maturity of the notes.

2014 Convertible Notes

On January 7, 2014, we completed a private placement of convertible notes raising an aggregate of $55,000 in gross proceeds (the “January 2014 Notes”). The January 2014 Notes will pay interest at a rate of 5% per annum, mature 60 months after their date of issuance and are convertible into shares of our common stock at a conversion price of $0.06 per share (subject to adjustment as described in the January 2014 Notes) at any time prior to repayment, at the election of the Investor. In the aggregate, the Notes are initially convertible into up to 916,667 shares of our common stock.

At any time prior to maturity of the January 2014 Notes, with the consent of the holders of a majority in interest of the January 2014 Notes, we may prepay the outstanding principal amount of the January 2014 Notes plus unpaid accrued interest without penalty. Upon the commission of any act of bankruptcy by the Company, the execution by the Company of a general assignment for the benefit of creditors, the filing by or against the Company of a petition in bankruptcy or any petition for relief under the federal bankruptcy act or the continuation of such petition without dismissal for a period of 90 days or more, or the appointment of a receiver or trustee to take possession of the property or assets of the Company, the outstanding principal and all accrued interest on the January 2014 Notes will accelerate and automatically become immediately due and payable.

The Investors in the offering included three directors of the Company. The principal amounts of their respective Notes are as set forth below:

Investor	Note Principal
Joseph C. McNay	$	25,000
Allan L. Goldstein	$	10,000
L. Thompson Bowles	$	5,000

The Company has evaluated the terms of the January 2014 Notes which contain a down round provision under which the conversion price could be decreased as a result of future equity offerings, as defined in the January 2014 Notes. The adjustment would reduce the conversion price of the January 2014 Notes to be equivalent to that of the newly issued stock or stock-related instruments. As a result, the Company concluded that the conversion feature represented an embedded conversion feature for accounting purposes and should be recognized as a derivative liability, requiring a mark-to-market adjustment at the end of each reporting period until the related January 2014 Notes have been settled. The bifurcated liability of $55,000 was recorded on the date of issuance which resulted in a residual debt value of $0. The discount related to the embedded feature will be accreted back to debt through the maturity of the notes.

The Company recorded interest expense and discount accretion as set forth below:

	For the three months ended
	March 31, 2015		March 31, 2014

2012 Notes	$	3,699	$	7,039

March 2013 Notes		13,870		13,870

July 2013 Notes		4,521		4,521

September 2013 Notes		17,149		17,149

January 2014 notes		3,390		3,127

Total interest expense	$	42,629	$	45,706

The fair value of the derivative liability is as follows:

	March 31, 2015		December 31, 2014

March 2013 Notes	$	825,000	$	412,500

July 2013 Notes		366,667		183,334

September 2013 Notes		1,177,000		588,500

January 2014 notes		201,669		100,836

Total Fair value of derivative liability	$	2,570,336	$	1,285,170

The change in fair value of derivative liability is as follows:

	For the three months ended
	March 31, 2015		March 31, 2014

March 2013 Notes	$	412,500	$	562,500

July 2013 Notes		183,333		250,000

September 2013 Notes		588,500		802,500

January 2014 notes		100,833		100,833

Total change in fair value of derivative	$	1,285,166	$	1,715,833

License agreement

Joint Venture Agreement with G-treeBNT

On January 28, 2015, the Company entered into the Joint Venture Agreement with G-treeBNT, a shareholder in the Company. The Joint Venture Agreement provides for the creation of the Joint Venture, jointly owned by the Company and G-treeBNT, that will commercialize RGN-259 for treatment of dry eye and neurotrophic keratopathy in the United States.

G-treeBNT is solely responsible for funding all the product development and commercialization efforts of the Joint Venture. G-treeBNT made an initial contribution of $3 million in cash and received an initial equity stake of 51%. G-treeBNT’s equity stake may increase upon the Joint Venture achieving certain product development milestones (including receipt of a new drug application (NDA) by the U.S. FDA) and the additional funding by G-treeBNT.

Pursuant to the Joint Venture Agreement, the Company and the Joint Venture entered into a royalty-bearing license agreement (the “License Agreement”) pursuant to which the Company granted to the Joint Venture the right to develop and exclusively commercialize RGN-259 in the United States, and received an initial equity stake in the Joint Venture of 49% which may be diluted as G-treeBNT’s ownership increases. The Company is not required or otherwise obligated to provide financial support to the Joint Venture.

The Joint Venture is responsible for executing all development and commercialization activities under the License Agreement, which activities will be directed by a joint development committee comprised of representatives of the Company and G-treeBNT. The License Agreement has a term that extends to the later of the expiration of the last patent covered by the License Agreement or 25 years from the first commercial sale under the License Agreement. The License Agreement may be earlier terminated if the Joint Venture fails to meet certain commercialization milestones, if either party breaches the License Agreement and fails to cure such breach, as a result of government action that limits the ability of the Joint Venture to commercialize the product, as a result of a challenge to a licensed patent, following termination of the license between the Company and certain agencies of the United States federal government, or upon the bankruptcy of either party.

Under the License Agreement, the Company received $0.5 million in up-front payments and is also entitled to an additional payment of $0.5 million upon the achievement of certain defined milestones, and to royalties on the Joint Venture’s future sales of products. The Company is accounting for the License Agreement with the Joint Venture as a revenue arrangement. The Company has determined that the deliverables within the License Agreement, including a delivered element (providing the license) and an undelivered element (participation on the joint development committee), do not have stand-alone value and, as such, are treated as a single unit of accounting. As a result, the Company is recognizing the up-front milestone payments as revenue ratably over the anticipated life of the joint development committee, or 25 years. The joint development committee had not commenced activities as of March 31, 2015 therefore the recognition of the license fee has not yet begun. Revenue will be recognized for future royalty payments as they are earned.

Stockholders’ Equity

On August 29, 2014, the Company received gross proceeds of $1,000,000 and issued 8,333,333 shares of common stock at $0.12 per share pursuant to the securities purchase and licensing agreements signed with G-treeBNT on March 7, 2014. Under the securities purchase agreement, G-treeBNT invested $1,350,000 for the issuance of 11,250,000 common shares at $0.12 per share and was required to invest an additional $1,000,000 at $0.12 per share on or before August 31, 2014. Under the terms of the security purchase agreement, G-treeBNT also has the right to make an optional investment to acquire an additional 5.5 million shares of common stock at $0.15 per share. Such optional investment right expired on January 31, 2015.

Commitments

In June 2014 we reduced our office space and amended our lease agreement for the reduced space. The new lease commitment is for 36 months and our rental payments for this period will be approximately $4,500 per month.

10.

Subsequent Event

In April 2015 we entered into a contract with an investor relations firm to provide services for six months. Under the agreement the Company will pay $5,000 per month and has issued 30,000 shares of common stock as compensation. In addition, in May 2015 the Company has issued 249,671 shares of common stock pursuant to the “cashless” exercise of warrants issued in 2011.

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q, including this Part I., Item 2., “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements regarding us and our business, financial condition, results of operations and prospects within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the words “project,” “believe,” “anticipate,” “plan,” “expect,” “estimate,” “intend,” “should,” “would,” “could,” “will,” “may” or other similar expressions. In addition, any statements that refer to projections of our future financial performance, our clinical development programs and schedules, our future capital resources and funding requirements, our anticipated growth and trends in our business and other characterizations of future events or circumstances are forward-looking statements. We cannot guarantee that we will achieve the plans, intentions or expectations expressed or implied in our forward-looking statements. There are a number of important factors that could cause actual results, levels of activity, performance or events to differ materially from those expressed or implied in the forward-looking statements we make, including those described under “Risk Factors” set forth below in Part II., Item 1A. In addition, any forward-looking statements we make in this document speak only as of the date of this report, and we do not intend to update any such forward-looking statements to reflect events or circumstances that occur after that date.

Business Overview

We are a biopharmaceutical company focused on the development of a novel therapeutic peptide, Thymosin beta 4, or Tß4, for tissue and organ protection, repair, and regeneration. We have formulated Tß4 into three distinct product candidates in clinical development:

• RGN-259, a preservative-free topical eye drop for regeneration of corneal tissues damaged by injury, disease or other pathology;

• RGN-352, an injectable formulation to treat cardiovascular diseases, central and peripheral nervous system diseases, and other medical indications that may be treated by systemic administration; and

• RGN-137, a topical gel for dermal wounds and reduction of scar tissue.

We are continuing strategic partnership discussions with biotechnology and pharmaceutical companies regarding the further clinical development of all of our product candidates.

In addition to our three pharmaceutical product candidates, we are also pursuing limnited development of peptide fragments and derivatives of Tß4 for potential cosmeceutical and other personal care uses. These fragments are select amino acid sequences, and variations thereof, within the Tß4 molecule that have demonstrated activity in several in vitro preclinical research studies that we have sponsored. We believe the biological activities of these fragments may be useful, for example, in developing novel cosmeceutical products for the anti-aging market. Our strategy is to collaborate with another company to develop cosmeceutical formulations based on these peptides.

Future Plans

On January 28, 2015, we announced that we entered into a Joint Venture, ReGenTree, jointly owned by us and G-treeBNT Co., Ltd., a Korean pharma company headquartered in Gyeonggi-do, Korea (“G-treeBNT”), that will commercialize RGN-259 for treatment of patients with dry eye and neurotrophic keratopathy in the United States. G-treeBNT will be responsible for funding all product development and commercialization efforts, and hold a majority interest, of ReGenTree that varies depending on development milestones achieved and eventual commercialization path, if successful. In conjunction with the Joint Venture Agreement, we also entered into a royalty-bearing license agreement pursuant to which we granted to ReGenTree the right to develop and exclusively commercialize RGN-259 in the United States. We will receive a total of $1 million in two tranches under the terms of the License Agreement, the first which was received in March 2015 and a second in the amount of $500,000, within forty-five business days after enrollment of the first patient in an ophthalmic trial in the U.S. We are also entitled to royalties as a percentage of net of sales ranging from the mid-single digits to the low-double digits based on the medical indications approved and whether the Joint Venture commercializes products directly or through a third party. RegeneRx possesses one of three board seats and certain major decisions within ReGenTree, such as commercialization strategy, mergers, and acquisitions, require unanimous consent of the board.

On March 9, 2015, RegeneRx announced that its joint venture partner and licensee, G-treeBNT, will receive $7.28 million USD to expand international development of its product candidate, RGN-259 (designated GBT-201 in Korea). The $7.28 million will be used for development of RGN-259/GBT-201 for dry eye syndrome and neurotrophic keratopathy in the U.S. through the U.S. joint venture, ReGenTree, LLC.

Currently, we have active partnerships in three major territories: the U.S., China and Pan Asia. Our partners have been moving forward and making significant progress in each territory and are preparing to initiate their clinical trials programs this year. In each case, the cost of development is being borne by our partners with no financial obligation for RegeneRx. Patient accrual, treatment, and follow-up for the ophthalmic trials are relatively fast, as opposed to most other clinical efforts, so data should be forthcoming in months, not years, after patients begin enrollment. We believe we should be able to maintain our existing operations at the current level into the second quarter of 2016 while we await results from these trials and continue to seek additional partnership opportunities.

Development of Product Candidates

RGN-259

RGN-259 is our proprietary preservative-free eye drop formulation of Thymosin beta 4. In September 2011, we completed a Phase 2a exploratory clinical trial evaluating the safety and efficacy of RGN-259 in 72 patients with moderate dry eye syndrome. Patients were randomly assigned to receive either RGN-259 or placebo in this double-masked, placebo-controlled trial. All patients received either RGN-259 (0.1% concentration) or placebo, twice daily for 30 days. Various signs and symptoms of dry eye, such as the degree of ocular surface damage, ocular itching, burning and grittiness, among others, were graded periodically during and following the treatment period. The trial was conducted by Ora Inc., an ophthalmic contract research organization that specializes in dry eye research and clinical trials, and utilized Ora’s Controlled Adverse Environment (CAE ^® ) chamber, which is a model that exacerbates and standardizes signs and symptoms in the dry eye patient.

In November 2011, we reported preliminary safety and efficacy results from the trial. RGN-259 was deemed safe and well-tolerated, with no observed drug-related adverse events.

The co-primary outcome measures evaluated in the trial were inferior corneal fluorescein staining and decreased ocular discomfort on day 29, 24 hours after CAE ^® challenge. Various secondary outcome efficacy measures were also evaluated in the trial. While the study did not meet statistical significance for reducing inferior corneal fluorescein staining, it did show a positive trend in this exploratory trial. RGN-259 did, however, show a statistically significant efficacy result in the other co-primary endpoint of decreased ocular discomfort and also demonstrated statistical significance in several secondary endpoints such as reduction of central corneal and superior corneal staining, important signs in dry eye patients and approvable endpoints by the FDA.

Key outcome measures were as follows:

Patients receiving RGN-259 experienced a 325% greater reduction from baseline in central corneal fluorescein staining compared to placebo at the 24 hour recovery period (p = 0.0075). Reduction of fluorescein staining is indicative of a reduction in ocular surface damage of the central cornea;

Patients receiving RGN-259 experienced a 257% greater reduction from baseline in exacerbation of superior corneal fluorescein staining in the CAE ^® chamber as compared to the placebo (p = 0.0210); and

Patients receiving RGN-259 experienced a 27.3% greater reduction in exacerbation of ocular discomfort at day 28 during a 75-minute challenge in the CAE chamber compared to the placebo group (p = 0.0244). Reduction indicates that RGN-259 can slow progression of ocular symptoms in patients with dry eye syndrome.

Other CAE ^® -related findings, such as peripheral (combination of the average of superior and inferior) corneal staining reduction, were observed having statistical significance, while others had positive trends after treatment with RGN-259. These observations are in line with the known biological properties and mechanisms of action of RGN-259 reported in various nonclinical studies.

With respect to inferior corneal fluorescein staining, we did see a positive trend toward improvement, at day 28 during exposure to adverse conditions in the CAE ^® chamber in patients receiving RGN-259 compared to placebo, although this improvement was not deemed to be statistically significant (p = 0.0968).

Statistical significance (p value) of ≤ 0.05 is the generally accepted threshold for showing an outcome did not happen merely by chance.

The co-primary outcome measures, selected at the outset of this initial Phase 2a exploratory trial, were based on the best available animal data at the time but without the benefit of any actual human clinical experience in dry eye. Therefore, we believe that not having met one of the two co-primary outcome measures at this stage is not as important as identifying statistically significant outcomes that could potentially serve as approvable endpoints in later stage or in pivotal Phase 3 clinical trials. We believe that the statistically significant observation of reduction in central and/or superior corneal staining, as well as symptom improvements observed in the trial and described above, reflect actual patient benefits and would represent acceptable outcome measures to the FDA for possible use in follow-up Phase 2b or confirmatory pivotal Phase 3 trials. We prepared a clinical study report for submission to the FDA that describes the results of the exploratory Phase 2a clinical trial and the results have also been accepted for publication in an appropriate medical journal.

In June 2012, we reported preliminary results from a double-masked, vehicle-controlled, physician-sponsored Phase 2 clinical trial evaluating RGN-259 for the treatment of patients with severe dry eye. RGN-259 was observed to be safe and well-tolerated and met key efficacy objectives with statistically significant sign and symptom improvements, compared to vehicle control, at various time intervals, including 28 days post-treatment.

In the trial, nine patients with severe dry eye (18 eyes) were treated with RGN-259 or vehicle control six times daily over a period of 28 days. They were evaluated upon entering the study after a two-week washout period, at weekly intervals during the treatment phase, at the end of the 28-day treatment period, and at a follow-up visit 28 days after treatment. Statistically significant differences in sign and symptom assessments, such as ocular discomfort and corneal fluorescein staining, were seen at various time points throughout the study. Of particular note were the differences between RGN-259 and vehicle control 28 days post-treatment, or the follow-up period. The RGN-259-treated group had a 35.1% reduction of ocular discomfort compared to vehicle control (p = 0.0141), and a 59.1% reduction of total corneal fluorescein staining compared to vehicle control (p = 0.0108) at 28 days after treatment showing that the repair was sustained long after treatment cessation.

Consistent with the reduction of ocular discomfort and fluorescein staining at the 28-day follow-up visit, other improvements seen in the RGN-259-treated patients included tear film breakup time and increased tear volume production. Likewise, these improvements were seen at other time points in the study. These results were recently published in an appropriate medical journal.

Strategic Partnerships

Lee’s Pharmaceuticals . In July 2012, we entered into a License Agreement with Lee’s Pharmaceutical (HK) Limited (“Lee’s”), headquartered in Hong Kong, for the license of Thymosin Beta 4 in any pharmaceutical form, including our RGN-259, RGN-352 and RGN-137 product candidates, in China, Hong Kong, Macau and Taiwan. Lee’s has filed an investigational new drug application IND with the Chinese FDA to conduct a Phase 2, randomized, double-masked, dose-response clinical trial with RGN-259 in China for dry-eye syndrome. They have informed us that they expect to begin enrollment of the first patient before the end of Q2 of 2015 and complete the study by the end of the year. Lee’s is an affiliate of Sigma-Tau, which collectively with its affiliates is our largest stockholder.

G-treeBNT . In March 2014, we entered into a License Agreement with G-treeBNT for the license of RGN-259. G-treeBNT licensed certain development and commercialization rights for RGN-259, in Asia (excluding China, Hong Kong, Macau and Taiwan) G-treeBNT is currently our second largest shareholder. G-tree has filed an IND with the Korean FDA to conduct a Phase 2b/3 study with RGN-259 in patients with dry eye syndrome. G-tree has informed us that it expects to begin enrolling patients in the second half of 2015 and complete the study in first half of 2016.

U.S. Joint Venture (ReGenTree, LLC) . On January 28, 2015, we announced that we entered into a Joint Venture Agreement (the “ Joint Venture Agreement ”) with G-treeBNT. The Joint Venture Agreement provides for the creation of an entity (the “ Joint Venture ” or “ReGenTree”), owned by us and G-treeBNT, that will commercialize RGN-259 for treatment of dry eye and neurotrophic keratopathy in the United States. G-treeBNT will be responsible for funding product development and commercialization efforts, and hold a majority interest, of ReGenTree. In conjunction with the Joint Venture Agreement, we also entered into a royalty-bearing license agreement (the “ License Agreement ”) with ReGenTree pursuant to which we granted to ReGenTree the right to develop and exclusively commercialize RGN-259 in the United States.

ReGenTree expects to submit the Phase 3 protocol for neurotrophic keratopathy (an orphan indication) to the U.S. FDA, after which, if there is no objection from the FDA, we may begin enrolling patients. ReGenTree has contracted with Ora Inc., a well know contract research organization (CRO), specializing in ophthalmology, to manage the trial in the U.S. We expected to evaluate 42 patients in the randomized, double-masked, placebo-controlled clinical trial.

ReGenTree is planning to meet with the U.S. FDA to discuss its plans for a Phase 2b clinical trial in patients with dry eye syndrome using Ora’s CAE ^® model. Ora Inc. has also been contracted to manage this trial and ReGenTree expects to begin enrolling patients in this randomized, double-masked, placebo-controlled clinical trial later this year.

G-treeBNT has been building the CMC (chemistry manufacturing controls) dossier required for Phase 3 clinical trials in the U.S. and in Korea. This comprehensive and critical effort ensures that final drug product manufacturing, packaging, stability, purity, reproducibility, etc., meets regulatory guidelines and product specifications.

RGN-352

During 2009, we completed a Phase 1a and Phase 1b clinical trial evaluating the safety, tolerability and pharmacokinetics of the intravenous administration of RGN-352 in 60 healthy subjects (40 in each group, 20 of whom participated in both Phases). Based on the results of these Phase 1 trials and extensive preclinical efficacy data published in peer-reviewed journals, in the second half of 2010, we began start-up activities for a Phase 2 study to evaluate RGN-352 (Tß4 Injectable Solution) in patients who had suffered an AMI. We had planned to begin enrolling patients in this clinical trial in the second quarter of 2011. However, in March 2011, we were notified by the FDA that the trial was placed on clinical hold as a result of our contract manufacturer’s alleged failure to comply with the current Good Manufacturing Practice (cGMP) regulations. We have since learned that the manufacturer has closed its manufacturing facility and filed for bankruptcy protection. The FDA prohibited us from using any of the active drug or placebo formulated by this manufacturer in human trials; consequently, we must have study drug (RGN-352 and RGN-352 placebo) manufactured by a new cGMP-compliant manufacturer in the event we seek to move forward with this trial. While we have identified a qualified manufacturer for RGN-352, we have elected to postpone activities on this trial until the requisite funding or a partner is secured.

In addition to the potential application of RGN-352 for the treatment of cardiovascular disease, preclinical research published in the scientific journals Neuroscience and the Journal of Neurosurgery, among others, indicates that RGN-352 may also prove useful for patients with multiple sclerosis, or MS, as well as patients suffering a stroke, traumatic brain injury, peripheral neuropathy, or spinal cord injury. In these preclinical studies, the administration of Tß4 resulted in regeneration of neuronal tissue by promoting remyelination of axons and stimulating oligodendrogenesis, resulting in improvement of neurological functional activity. In 2012, researchers studying Tß4 under a material transfer agreement (MTA) found that Tß4 had beneficial effects in animal models of peripheral neuropathy, one of the major complications of diabetes. This research was published in the journal of Neurobiology of Disease in 2012 and appears to corroborate previous findings using Tß4 for repair of central nervous system disorders. We are discussing possible partnership opportunities with companies interested in developing RGN-352 for this indication.

Based on our Phase 1 data and the preclinical research discussed above, we are evaluating various opportunities for government funding for a Phase 2a clinical trial to show proof-of-concept in each case while also talking with prospective strategic partners with the interest, capabilities and resources to further develop product candidate in these fields.

RGN-137

Clinical Development — Epidermolysis Bullosa (EB). In 2005, we began enrolling patients in a Phase 2 clinical trial designed to assess the safety and effectiveness of RGN-137 for the treatment of patients with EB. EB is a genetic disease of approximately 10 gene mutations that results in fragile skin and other epithelial structures (e.g., cornea and GI tract) that can blister spontaneously or separate at the slightest trauma or friction, creating a wound that at times does not heal or heals poorly. In severe cases, recurrent blistering and tissue loss may be life threatening. EB has been designated as an “orphan” indication by the FDA’s Office of Orphan Drugs. A portion of this trial was funded by a grant of $681,000 received from the FDA. In this randomized, double-blind, placebo-controlled, dose-response trial, nine U.S. clinical sites evaluated the safety, tolerability, and wound healing effectiveness of three different concentrations of RGN-137 compared to placebo. RGN-137 was applied topically to the skin, once daily for up to 56 consecutive days. We completed enrollment of 30 out of the original target of 36 patients and closed the Phase 2 trial in late 2011 as the availability of eligible patients had been exhausted. We submitted the final report to the FDA in 2014.

Clinical Development — Pressure Ulcers. In late 2005, we began enrolling patients in a Phase 2 clinical trial designed to assess the safety and effectiveness of RGN-137 for the treatment of patients with chronic pressure ulcers, commonly known as bedsores. In this randomized, double-blind, placebo-controlled, dose-response trial, 15 clinical sites in the United States enrolled a total of 72 patients to evaluate the safety, tolerability, and wound healing effectiveness of three different concentrations of RGN-137 compared to placebo. RGN-137 was applied topically to patients’ ulcers, once daily for up to 84 consecutive days. Patients in the trial were between 19 and 85 years old and had at least one stable Stage III or IV pressure ulcer with a surface area between 5 and 70 cm ² . Stage III and IV pressure ulcers are full thickness wounds that penetrate through the skin and muscle, sometimes completely to the bone.

In January 2009, we reported final data from this trial. RGN-137 was well-tolerated at all three dose levels studied, with no dose-limiting adverse events, which achieved the primary objective of the study. As for efficacy, all Tß4 doses performed similarly compared to placebo, with no statistically significant efficacy results. However, patients treated with the middle dose showed a 17% improvement of wound healing, which was the highest rate among the three active doses evaluated. The improvement in ulcer healing in this middle dose group following nine weeks of treatment was equal to the improvement in patients treated with placebo after 12 weeks of treatment. A follow-on evaluation, reported at the 3rd International Symposium on the Thymosins in Health and Disease in March 2012, showed that for those pressure ulcer patients’ wounds that healed, RGN-137 mid dose (0.02% Tβ4 gel product) accelerated wound closure with a median time to healing of 22 days as compared to 57 days for the placebo. Although those results are clinically significant, they were not statistically significant.

Clinical Development — Venous Stasis Ulcers. In mid-2006 we began enrolling patients in a Phase 2 clinical trial designed to assess the safety and effectiveness of RGN-137 for the treatment of patients with venous stasis ulcers. Venous stasis ulcers are a common type of chronic wound that develops on the ankle or lower leg in patients with chronic vascular disease. In these patients blood flow in the lower extremities is impaired leading to venous hypertension, edema (swelling) and mild redness and scaling of the skin that gradually progresses to ulceration. In this double-blind, placebo-controlled, dose-response study, 8 European sites in Italy (N=5) and Poland (N=3) make up the 72 patients randomized to receive three different concentrations of RGN-137 or placebo. RGN-137 or placebo was applied topically to patients’ ulcers once daily for consecutive days. A patient’s ulcer size and ulcer stability for enrollment were between 3 and 30 cm ² and at least 6 weeks in duration, respectively.

In 2009, we reported final data from that trial. All doses of RGN-137 were well tolerated. More patients achieved healing in the RGN-137 mid dose (0.03% Tβ4 gel product) than in any other dose group. The mid dose showed both an increased incidence of wound healing and a faster healing time compared to placebo. The mid dose decreased the median time to healing by 45% among those wounds that completely healed. A follow-on evaluation, reported at the 3rd International Symposium on the Thymosins in Health and Disease in March 2012, showed that for those venous stasis ulcer patients’ wounds greater than 3 cm ² that healed, the RGN-137 mid dose (0.03% Tβ4 gel product) accelerated wound closure with a median time to healing of 49 days as compared to 78 days for the placebo. Those results were both clinically and statistically significant.

G-treeBNT . In March 2014, we entered into a License Agreement with G-treeBNT to license certain development and commercialization rights for RGN-137 in the U.S. G-treeBNT has purchased approximately 19.6 million shares of our common stock in two closings and is currently our second largest shareholder.

Peptide Fragments for Cosmeceutical Applications

We are also seeking to identify and evaluate Tß4 peptide fragments and derivatives that may be useful as novel components in cosmeceutical and consumer products. We have identified several amino acid sequences, and variations thereof, within the Tß4 molecule that have demonstrated in vitro activity in preclinical research studies that we have sponsored, and we have filed a number of patent applications related to this research. We believe the biological activities of these fragments may be useful, for example, in developing novel cosmeceutical products for the anti-aging and, more broadly, the personal care markets. To date, research has suggested that these fragments suppress inflammation, accelerate the deposition of certain types of collagen, promote the production of elastin, and inhibit programmed cell death, among other activities. Our development and commercialization strategy is to identify suitable commercial partners to license these novel fragments for various cosmeceutical applications. We have held discussions with several multinational cosmetics and consumer products companies focused on potential collaborations to further develop and commercialize these fragments.

Our Strategy

We seek to maximize the value of our product candidates by advancing their clinical development and then identifying suitable partners for further development, regulatory approval, and marketing. We intend to engage in strategic partnerships with companies with clinical development and commercialization strengths in desired pharmaceutical therapeutic fields. We are actively seeking partners with suitable infrastructure, expertise and a long-term initiative in our medical fields of interest. To that end, we have entered several important licensing and joint venture agreements with pharmaceutical companies to develop our product candidates.

On January 28, 2015, we announced that we entered into a Joint Venture, ReGenTree, owned by us and G-treeBNT, that will develop and commercialize RGN-259 for treatment of dry eye and neurotrophic keratopathy in the United States. G-treeBNT will be responsible for funding product development and commercialization efforts, and hold a majority interest, of ReGenTree that varies depending on development milestones achieved and eventual commercialization path, if successful. In conjunction with the Joint Venture Agreement, we also entered into a royalty-bearing license agreement pursuant to which we granted to ReGenTree the right to develop and exclusively commercialize RGN-259 in the United States.

The Joint Venture with G-TreeBNT follows on two previous transactions with G-TreeBNT signed in March 2014 when we had entered into License Agreements for the license of the RGN-259 and RGN-137 product candidates. G-treeBNT licensed the development and commercialization rights for RGN-259, in Asia (excluding China, Hong Kong, Macau and Taiwan) while also licensing the development and commercialization rights for RGN-137 in the U.S.

We have entered into a License Agreement with Lee’s Pharmaceutical (HK) Limited, headquartered in Hong Kong, for the license of Thymosin Beta 4 in any pharmaceutical form, including our RGN-259, RGN-352 and RGN-137 product candidates, in China, Hong Kong, Macau and Taiwan. Lee’s is an affiliate of Sigma-Tau, which collectively with its affiliates is our largest stockholder.

We have entered into a strategic partnership with Defiante Farmaceutica S.A., (“Defiante”), a subsidiary and one of several entities affiliated with Sigma-Tau Group, a leading international pharmaceutical company which collectively comprise our largest shareholder, or Sigma-Tau, for development and marketing of RGN-137 and RGN-352 for specified indications in Europe and other contiguous countries. Defiante merged with Sigma-Tau Industrie Farmaceutiche Riunite S.P.A. in 2013 and Sigma-Tau has recently merged with an Italian pharmaceutical company.

Financial Operations Overview

We have never generated product revenues, and we do not expect to generate product revenues until the FDA approves one of our product candidates, if ever, and we begin marketing and selling it. Subject to the availability of financing, we expect to invest increasingly significant amounts in the furtherance of our current clinical stage programs and may add additional nonclinical studies and new clinical trials as we explore the potential of our current product candidates in target indications and explore the potential use of our Tß4-based product candidates in rare disease and orphan indications. As we expand our clinical development initiatives, we expect to incur substantial and increasing losses. Accordingly, we will need to generate significant product revenues in order to ultimately achieve and then maintain profitability. Also, we expect that we will need to raise substantial additional capital in order to meet product development requirements. We cannot assure investors that such capital will be available when needed, on acceptable terms, or at all.

During the quarter ended March 31, 2015, the Company sold $40,000 of Tß4 to G-treeBNT, there were no associated costs with this transaction as the cost of Tß4 had been expensed in a prior period.

Most of our expenditures to date have been for research and development, or R&D, activities and general and administrative, or G&A, activities. R&D costs include all of the wholly-allocable costs associated with our various clinical programs passed through to us by our outsourced vendors. Those costs include manufacturing Tß4 and peptide fragments, formulation of Tß4 into our product candidates, stability studies for both Tß4, and the various formulations, preclinical toxicology, safety and pharmacokinetic studies, clinical trial management, medical oversight, laboratory evaluations, statistical data analysis, regulatory compliance, quality assurance and other related activities. R&D includes cash and non-cash compensation, payroll taxes, travel and other miscellaneous costs of our internal R&D personnel, three persons in total, who are dedicated on a part-time hourly basis to R&D efforts. R&D also includes a proration of our common infrastructure costs for office space and communications. We expense our R&D costs as they are incurred.

R&D expenditures are subject to the risks and uncertainties associated with clinical trials and the FDA review and approval process. As a result, these expenses could exceed our expectations, possibly materially. We are uncertain as to what we will incur in future research and development costs for our clinical studies, as these amounts are subject to, management's continuing assessment of the economics of each individual research and development project and the internal competition for project funding.

G&A costs include outside professional fees for legal, business development, audit and accounting services. G&A also includes cash and non-cash compensation, travel and other miscellaneous costs of our internal G&A personnel, two in total, who are wholly dedicated to G&A efforts. G&A also includes a proration of our common infrastructure costs for office space, and communications. Our G&A expenses also include costs to maintain our intellectual property portfolio. Historically we have expanded our patent prosecution activities and in some cases, we have filed patent applications for non-critical strategic purposes intended to prevent others from filing similar patent claims. We continue to closely monitor our patent applications in the United States, Europe and other countries with the advice of outside legal counsel to determine if they will continue to provide strategic benefits. In cases where we believe the benefit has been realized or it becomes unnecessary due to the issuance of other patents, or for other reasons that will not affect the strength of our intellectual property portfolio, we have and will continue to abandon these patent applications in order to reduce our costs of continued prosecution or maintenance.

Critical Accounting Policies

In Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of our Annual Report on Form 10-K for the year ended December 31, 2014, which was filed with the SEC on March 31, 2015, which we refer to as the Annual Report, we included a discussion of the most significant accounting policies and estimates used in the preparation of our financial statements. There has been no material change in the policies and estimates used in the preparation of our financial statements since the filing of our Annual Report.

Results of Operations

Comparison of the three months ended March 31, 2015 and 2014

Revenues. For the three months ended March 31, 2015, we recorded revenue in the amount of $40,000 related to the sale of unformulated Tß4 to G-treeBNT for use in their product development work in Korea. We did not record any revenue in the three months ended March 31, 2014. There were no associated costs with this transaction as the cost of Tß4 had been expensed in a prior period.

R&D Expenses . For the three months ended March 31, 2015, our R&D expenses decreased by approximately $38,000, or 51%, to $36,000 from $75,000 for the same period in 2014. The decrease from 2014 reflects the execution of the our strategy to out license or partner our development programs and the early 2015 entry in the ReGenTree joint venture agreement In the first quarter of 2014 our primary R&D activity was in support of planning activities related to RGN-259 development for neurotrophic keratopathy under the orphan drug designation. Responsibility the development has been transferred to the ReGenTree joint venture. The R&D expenses for both periods reflect our limited development activity and are comprised of compensation, facility and G&A allocation and insurance. The 2015 decrease reflects the absence of costs associated with the 2014 planning activities with decreases seen in technology license (decrease of $7,000) personnel (decrease of $3,000) and allocations (decrease of $2,000) R&D consulting (decrease of $10,000) and stock option compensation (decrease of $15,000). We expect our R&D expenses will remain at low levels unless we decide to reinitiate internal R&D efforts for our unpartnered programs.

G&A Expenses. For the three months ended March 31, 2015, our G&A expenses increased by approximately $106,000, or 37%, to $395,000, from $289,000 for the same period in 2014. The increase was primarily the result compensation increases as well as legal costs incurred in association with completing the ReGenTree joint venture agreement. Increases are reflected in professional services (approximately $80,000) personnel costs ($50,000) and consulting fees ($14,000) offset by a decrease in stock option expense of $40,000. We expect that our G&A expenses will increase as we have increased cash compensation paid to our employees and have initiated investor relations activities to enhance communication with shareholders.

Net Loss. We incurred a net loss of $1,718,690 for the quarter ended March 31. 2015, a small decrease from the net loss of $2,125,094 recorded in the quarter ended March 31, 2014. In each period the net loss resulted primarily from our evaluation of the derivative liability associated with the conversion feature of the debt instruments issued by the company from March 2013 through January 2014. The value of this conversion feature is indexed to the share price of our common stock and increases as our share price increases. The share price of our common stock increased from $0.14 on December 31, 2014 to $0.26 March 31, 2015, which resulted in an increase in valuation of our convertible debt derivative component and the recording of an unrealized loss of $1,285,166. In the previous year’s period the share price of our common stock increased from $0.05 on December 31, 2013 to $0.20 on March 31, 2014, which resulted in an increase in valuation of our convertible debt derivative component and the recording of an unrealized loss of $1,715,834.

Liquidity and Capital Resources

Overview

We have not commercialized any of our product candidates to date and have incurred significant losses since inception. Over the past couple of years we have primarily financed our operations through the sale of a series of convertible promissory notes through private placements with accredited investors and the March and August 2014 private placements of common stock with G-TreeBNT. The report of our independent registered public accounting firm regarding our financial statements for the year ended December 31, 2014 contained an explanatory paragraph regarding our ability to continue as a going concern based upon our history of net losses and dependence on future financing in order to meet our planned operating activities.

We had cash and cash equivalents of approximately $1,062,000 at March 31, 2015. This amount coupled with a second $500,000 payment that will be triggered by the enrollment of the first patient on a RGN-259 clinical trial conducted by ReGenTree should fund our planned operations into the second quarter of 2016. This estimate could change if the patient enrollment is delayed. This estimate also does not include receipt of any funds from grants, new partnerships or the raising of additional capital if the market climate warrants. Additionally, we intend to continue to pursue additional partnering activities, particularly for RGN-352, our injectable systemic product candidate for cardiac and central nervous system indications.

Cash Flows for the Three Months Ended March 31, 2015 and 2014

Net cash provided by operating activities was approximately $218,000 for the three months ended March 31, 2015 compared to approximately $261,000 used in operating activities for the three months ended March 31, 2014. During the first quarter of 2015 we received $500,000 from ReGenTree pursuant to the license agreement with the joint venture, resulting in net cash being provided by operations versus the comparable period when net cash was used by operations. During the three months ended March 31, 2014, we received $1,500,000 from the sale of common stock to G-treeBNT and $55,000 in January 2014, representing the net proceeds of the sale of convertible notes as described in Note 6 to our unaudited condensed financial statements included in this report. We did not sell any common stock or issue any convertible notes in the three-month period ending March 31, 2015.

Future Funding Requirements

The expenditures that will be necessary to execute our business plan are subject to numerous uncertainties that may adversely affect our liquidity and capital resources. Currently, we have active partnerships in three major territories: the U.S., China and Pan Asia. Our partners have been moving forward and making significant progress in each territory and are prepared to initiate their clinical trials programs this year. In each case, the cost of development is being borne by our partners with no financial obligation for RegeneRx. Patient accrual, treatment, and follow-up for the ophthalmic trials are relatively fast, as opposed to most other clinical efforts, so data should be forthcoming in months, not years, after patients begin enrollment. We, therefore, should be able to maintain our existing operations into the second quarter of 2016 at the current level while we await results from these trials and continue to seek additional partnership opportunities.

Our current cash, together with the second $500,000 payment that will be triggered by the enrollment of the first patient on a RGN-259 clinical trial conducted by ReGenTree total approximately $1.5 million. Based on our preliminary operating budget, we believe we have funds to last into the second quarter of 2016. This estimate could change if the patient enrollment is delayed. This estimate also does not include receipt of any funds from grants, new partnerships or the raising of additional capital if the market climate warrants.

In addition, the length of time required for clinical trials varies substantially according to the type, complexity, novelty and intended use of a product candidate. Some of the factors that could impact our liquidity and capital needs include, but are not limited to:

the progress of our clinical trials;

the progress of our research activities;

the number and scope of our research programs;

the progress of our preclinical development activities;

the costs involved in preparing, filing, prosecuting, maintaining, enforcing and defending patent and other intellectual property claims;

the costs related to development and manufacture of preclinical, clinical and validation lots for regulatory purposes and commercialization of drug supply associated with our product candidates;

our ability to enter into corporate collaborations and the terms and success of these collaborations;

the costs and timing of regulatory approvals; and

the costs of establishing manufacturing, sales and distribution capabilities.

In addition, the duration and the cost of clinical trials may vary significantly over the life of a project as a result of differences arising during the clinical trial protocol, including, among others, the following:

the number of patients that ultimately participate in the trial;

the duration of patient follow-up that seems appropriate in view of the results;

the number of clinical sites included in the trials; and

the length of time required to enroll suitable patient subjects.

Also, we test our product candidates in numerous preclinical studies to identify indications for which they may be efficacious. We may conduct multiple clinical trials to cover a variety of indications for each product candidate. As we obtain results from trials, we may elect to discontinue clinical trials for certain product candidates or for certain indications in order to focus our resources on more promising product candidates or indications.

Our proprietary product candidates have not yet achieved FDA regulatory approval, which is required before we can market them as therapeutic products. In order to proceed to subsequent clinical trial stages and to ultimately achieve regulatory approval, the FDA must conclude that our clinical data establish safety and efficacy. Historically, the results from preclinical studies and early clinical trials have often not been predictive of results obtained in later clinical trials. A number of new drugs and biologics have shown promising results in clinical trials, but subsequently failed to establish sufficient safety and efficacy data to obtain necessary regulatory approvals.

We were previously committed under an office space lease through January 2013 and continued to occupy the space on a month to month basis through May 2014. Beginning in June 2014 we consolidated our office space and amended our lease agreement for the reduced space. The new lease commitment is for 36 months and our rental payments for this period will be approximately $4,500 per month.

Sources of Liquidity

We have not commercialized any of our product candidates to date and have primarily financed our operations through the issuance of common stock and common stock warrants in private and public financings in addition to a series of five convertible debt placements from October 2012 to January 2014. In March 2014 we entered into a strategic transaction with G-treeBNT which includes the purchase of approximately 19.6 million shares of common stock by G-treeBNT in two tranches, G-treeBNT is now our second largest stockholder. Our largest stockholder group, which we refer to as Sigma-Tau, has historically provided significant equity capital to us, including $200,000 pursuant to the convertible debt placement in October 2012 and $150,000 pursuant to the convertible debt placement in September 2013.

On January 28, 2015, we announced that we entered into a Joint Venture, ReGenTree, owned by us and G-treeBNT, that will commercialize RGN-259 for treatment of dry eye and neurotrophic keratopathy in the United States. G-treeBNT will be responsible for funding product development and commercialization efforts of, and hold a majority interest in, ReGenTree. In conjunction with the Joint Venture Agreement, we also entered into a royalty-bearing license agreement pursuant to which we granted to ReGenTree the right to develop and exclusively commercialize RGN-259 in the United States. We will receive a total of $1 million in two tranches under the terms of the License Agreement: (i) within forty-five business days after closing and (ii) within forty-five business days after enrollment of the first patient in an ophthalmic trial in the U.S. In March 2015, we received the first of the two $500,000 payments under the license agreement. This amount, plus our current cash, coupled with the second $500,000 payment that will be triggered by the enrollment of the first patient on a RGN-259 clinical trial conducted by ReGenTree should fund our planned operations into the second quarter of 2016. This estimate could change if the patient enrollment is delayed. This estimate also does not include receipt of any funds from grants, new partnerships or the raising of additional capital if the market climate warrants. Additionally, we intend to continue to pursue additional partnering activities, particularly for RGN-352, our injectable systemic product candidate for cardiac and central nervous system indications.

Licensing Agreements

As noted above, we have entered into two strategic agreements with G-treeBNT. G-treeBNT licensed the development and commercialization rights for RGN-259 in Asia (excluding China, Hong Kong, Macau and Taiwan) while also licensing the development and commercialization rights for RGN-137 in the U.S. Most recently we entered into a joint venture and licensing agreement with G-treeBNT that, under the name ReGenTree, will commercialize RGN-259 for treatment of dry eye and neurotrophic keratopathy in the United States. The license agreements provide for the opportunity for us to receive milestone payments upon specified commercial events and royalty payments in connection with any commercial sales of the licensed products in the respective territories. In the case of the Joint Venture, we will also retain an equity interest of ReGenTree that varies depending on development milestones achieved by our Joint Venture partner and eventual commercialization path, if successful. However, there are no assurances that we will be able to attain any such milestones or generate any such royalty payments under the agreements.

We have a license agreement with Sigma-Tau that provides the opportunity for us to receive milestone payments upon specified events and royalty payments in connection with commercial sales of Tß4 in Europe. However, we have not received any milestone payments to date, and there can be no assurance that we will be able to attain such milestones and generate any such payments under the agreement.

We also have entered into a license agreement with Lee’s Pharmaceuticals that provides for the opportunity for us to receive milestone payments upon specified events and royalty payments in connection with any commercial sales of Tß4-based products in China, Hong Kong, Macau and Taiwan. However, there are no assurances that we will be able to attain any such milestones or generate any such royalty payments under the agreement.

Government Grants

We have pursued, and continue to pursue, government funding for both RGN-259 and RGN-352.

Other Financing Sources

Other potential sources of outside capital include entering into additional strategic business relationships, additional issuances of equity securities or debt financing or other similar financial instruments, and the exercise of our outstanding warrants. If we raise additional capital through a strategic business relationship, we may have to give up valuable rights to our intellectual property. If we raise funds by selling additional shares of our common stock or securities convertible into our common stock, the ownership interest of our existing stockholders may be significantly diluted. In addition, if additional funds are raised through the issuance of preferred stock or debt securities, these securities are likely to have rights, preferences and privileges senior to our common stock and may involve significant fees, interest expense, restrictive covenants and the granting of security interests in our assets.

Our failure to successfully address liquidity requirements could have a materially negative impact on our business, including the possibility of surrendering our rights to some technologies or product opportunities, delaying our clinical trials, or ceasing operations. There can be no assurance that we will be able to obtain additional capital in sufficient amounts, on acceptable terms, or at all.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements, as such term is defined in Item 303(a)(4) of Regulation S-K.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Our cash equivalents, which are generally comprised of Federally-insured bank deposits, are subject to default, changes in credit rating and changes in market value. These investments are also subject to interest rate risk and will decrease in value if market interest rates increase. As of March 31, 2015, these cash equivalents were approximately $1,062,000. Due to the short-term nature of these investments, if market interest rates differed by 10% from their levels as of March 31, 2015, the change in fair value of our financial instruments would not have been material.

Item 4. Controls and Procedures

a) Evaluation of Disclosure Controls and Procedures

Our management, under the supervision and with the participation of our President and Chief Executive Officer, in his capacity as our principal executive officer and our principal financial officer, performed an evaluation of the effectiveness of the design and operation of our “disclosure controls and procedures” (as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended) as of March 31, 2015. Based upon this evaluation, management has concluded that, as of March 31, 2015, our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed is recorded, processed, summarized and reported within the time periods specified under applicable rules of the SEC, and that such information is accumulated and communicated to management, including our President and Chief Executive Officer, as appropriate, to allow timely decisions regarding required disclosures.

b) Changes in Internal Controls

There were no changes in our internal control over financial reporting during the three months ended March 31, 2015 that have materially affected, or which are reasonably likely to materially affect, our internal control over financial reporting.

Part II – Other Information

Item 1.

Legal Proceedings

None.

Item 1A.

Risk Factors

Set forth below and elsewhere in this report and in other documents we file with the SEC are risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements contained in this report. The descriptions below include any material changes to and supersede the description of the risk factors affecting our business previously disclosed in “Part II, Item 1A. Risk Factors” of the Annual Report.

Risks Related to Our Liquidity and Need for Financing

Before giving effect to any potential additional sales of our securities, we estimate that our existing capital resources and the anticipated cash inflows from the January 2015 Joint Venture and License Agreement with G-treeBNT will only be sufficient to fund our operations into the second quarter of 2016.

As of March 31, 2015 we had cash on hand of approximately $1,062,000, which reflects the March 25, 2015 receipt of $500,000 pursuant to the license agreement signed between RegeneRx and ReGenTree “the Joint Venture”. Pursuant to the Joint Venture Agreement G-treeBNT will be responsible for funding the product development and commercialization efforts of the Joint Venture and will hold a majority equity stake in the Joint Venture. With the completion of the Joint Venture Agreement we intend to continue to pursue additional partnering activities, most notably for RGN-352, our injectable systemic product candidate for cardiac and central nervous system indications. We estimate that our current cash resources coupled with a second payment of $500,000 expected to be received from ReGenTree within the next twelve months, predicated on the enrollment of the first patient in an ophthalmic trial, will fund our planned operations into the second quarter of 2016. This estimate could change and we may need additional capital in less than 12 months if we undertake additional efforts to support our objectives or the patient enrollment is delayed.

Our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement and involves risks and uncertainties, and actual results could vary as a result of a number of factors, including the factors discussed elsewhere in this report. We have based this estimate on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect.

In addition to our current development objectives, we will need substantial additional capital for the continued development of product candidates through marketing approval and for our longer-term future operations.

Beyond our current liquidity needs, we anticipate that substantial new capital resources will be required to continue our longer-term independent product development efforts, including any and all follow-on trials that will result from our current clinical programs beyond those currently contemplated, and to scale up manufacturing processes for our product candidates. However, the actual amount of funds that we will need will be determined by many factors, some of which are beyond our control. These factors include, without limitation:

the scope of our clinical trials, which is significantly influenced by the quality of clinical data achieved as trials are completed and the requirements established by regulatory authorities;

the speed with which we complete our clinical trials, which depends on our ability to attract and enroll qualifying patients and the quality of the work performed by our clinical investigators and contract research organizations chosen to conduct the studies;

the time required to prosecute, enforce and defend our intellectual property rights, which depends on evolving legal regimes and infringement claims that may arise between us and third parties;

the ability to manufacture at scales sufficient to supply commercial quantities of any of our product candidates that receive regulatory approval, which may require levels of effort not currently anticipated; and

the successful commercialization of our product candidates, which will depend on our ability to either create or partner with an effective commercialization organization and which could be delayed or prevented by the emergence of equal or more effective therapies.

Emerging biotechnology companies like us may raise capital through corporate collaborations and by licensing intellectual property rights to other biotechnology or pharmaceutical enterprises. We intend to pursue this strategy, but there can be no assurance that we will be able to enter into additional license agreements with respect to our intellectual property or product development programs on commercially reasonable terms, if at all. There are substantial challenges and risks that will make it difficult to successfully implement any of these alternatives. If we are successful in raising additional capital through such a license or collaboration, we may have to give up valuable rights to our intellectual property. In addition, the business priorities of a strategic partner may change over time, which creates the possibility that the interests of the strategic partner in developing our technology may diminish and could have a potentially material negative impact on the value of our interest in the licensed intellectual property or product candidates.

Further, if we raise additional funds by selling shares of our common stock or securities convertible into our common stock the ownership interest of our existing stockholders may be significantly diluted. If additional funds are raised through the issuance of preferred stock or debt securities, these securities are likely to have rights, preferences and privileges senior to our common stock and may involve significant fees, interest expense, restrictive covenants or the granting of security interests in our assets.

Our failure to successfully address our long-term liquidity requirements would have a material negative impact on our business, including the possibility of surrendering our rights to some technologies or product opportunities, delaying our clinical trials or ceasing our operations.

We have incurred losses since inception and expect to incur significant losses in the foreseeable future and may never become profitable.

We have not commercialized any product candidates to date and incurred net operating losses every year since our inception in 1982. We believe these losses will continue for the foreseeable future, and may increase, as we pursue our product development efforts related to Tß4. As of March 31, 2015, our accumulated deficit totaled approximately $102 million.

As we expand our research and development efforts and seek to obtain regulatory approval of our product candidates to make them commercially viable, we anticipate substantial and increasing operating losses. Our ability to generate revenues and to become profitable will depend largely on our ability, alone or through the efforts of third-party licensees and collaborators, to efficiently and successfully complete the development of our product candidates, obtain necessary regulatory approvals for commercialization, scale-up commercial quantity manufacturing capabilities either internally or through third-party suppliers, and market our product candidates. There can be no assurance that we will achieve any of these objectives or that we will ever become profitable or be able to maintain profitability. Even if we do achieve profitability, we cannot predict the level of such profitability. If we sustain losses over an extended period of time and are not otherwise able to raise necessary funds to continue our development efforts and maintain our operations, we may be forced to cease operations.

Our common stock is quoted on the over-the-counter market, which subjects us to the SEC’s penny stock rules and may decrease the liquidity of our common stock.

Our common stock is traded over-the-counter on the OTC Bulletin Board. Over-the-counter markets are generally considered to be less efficient than, and not as broad as, a stock exchange. There may be a limited market for our stock now that it is quoted on the OTC Bulletin Board, trading in our stock may become more difficult and our share price could decrease. Specifically, you may not be able to resell your shares of common stock at or above the price you paid for such shares or at all.

In addition, our ability to raise additional capital may be impaired because of the less liquid nature of the over-the-counter markets. While we cannot guarantee that we would be able to complete an equity financing on acceptable terms, or at all, we believe that dilution from any equity financing while our shares are quoted on an over-the-counter market would likely be substantially greater than if we were to complete a financing while our common stock is traded on a national securities exchange. Further, we are unable to use short-form registration statements on Form S-3 for the registration of our securities, which could impair our ability to raise additional capital as needed.

Our common stock is also subject to penny stock rules, which impose additional sales practice requirements on broker-dealers who sell our common stock. The SEC generally defines “penny stock” as an equity security that has a market price of less than $5.00 per share, subject to certain exceptions. The ability of broker-dealers to sell our common stock and the ability of our stockholders to sell their shares in the secondary market will be limited and, as a result, the market liquidity for our common stock will likely be adversely affected. We cannot assure you that trading in our securities will not be subject to these or other regulations in the future.

The report of our independent registered public accounting firm contains explanatory language that substantial doubt exists about our ability to continue as a going concern.

The report of our independent registered public accounting firm on our financial statements for the year ended December 31, 2014 contains explanatory language that substantial doubt exists about our ability to continue as a going concern, without raising additional capital. As described in this report, we estimate that our existing capital resources, including the money received from G-treeBNT under the January 2015 Joint Venture and License Agreements will be adequate to fund our operations into 2016. This estimate could change and we may need additional capital in less than 12 months if we are able to undertake additional efforts to support our objectives. Therefore, we continue to seek other sources of capital, but if we are unable to obtain sufficient financing to support and complete these activities, then we would, in all likelihood, experience severe liquidity problems and may have to curtail our operations. If we curtail our operations, we may be placed into bankruptcy or undergo liquidation, the result of which will adversely affect the value of our common shares.

Risks Related to Our Business and Operations

Our planned Phase 2 clinical trial of RGN-352 was placed on clinical hold by the FDA in March 2011 and we are unsure when, if ever, we will be able to resume this trial.

In the second half of 2010, we implemented the development plans for our phase 2 clinical trial to evaluate RGN-352 in patients who have suffered an acute myocardial infarction, or AMI. We had planned to begin enrolling patients near the end of the first quarter of 2011. However, in March 2011, we were notified by the FDA that the trial was placed on clinical hold as a result of our contract manufacturer’s alleged failure to comply with current Good Manufacturing Practice (“cGMP”) regulations. The FDA has prohibited us from using any of the active drug or placebo manufactured by this manufacturer in human trials, which will require us to identify a cGMP-compliant manufacturer and to have new material produced in the event that we seek to resume this trial. We have also learned that the contract manufacturer has closed its manufacturing facility and has filed for bankruptcy protection. Significant preparatory time and procedures will be required before any new suitable manufacturer would be able to manufacture RGN-352 for the AMI trial. Since we are unable to estimate the length of time that the trial will be on clinical hold, we have elected to cease activities on this trial until the FDA clinical hold is resolved and the requisite funding might be secured. Consequently, there can be no assurance that we will be able to timely initiate trial activities or complete this trial, if at all.

All of our drug candidates are based on a single compound.

Our current primary business focus is the development of Tß4, and its analogues, derivatives and fragments, for the regeneration and accelerated repair of damaged tissue from non-healing dermal and corneal wounds, cardiac injury, central/peripheral nervous system diseases and other conditions, as well as an improvement in various functions, such as, but not limited to, cardiac and neurological. Unlike many pharmaceutical companies that have a number of unique chemical entities in development, we are dependent on a single molecule, formulated for different routes of administration and different clinical indications, for our potential commercial success. As a result, any common safety or efficacy concerns for Tß4-based products that cross formulations would have a much greater impact on our business prospects than if our product pipeline were more diversified.

We may never be able to commercialize our product candidates.

Although Tß4 has shown biological activity in in vitro studies and in vivo animal models and while we observed clinical activity and efficacious outcomes in our recent RGN-259 Phase 2a trial and earlier Phase 2 dermal trials, we cannot assure you that our product candidates will exhibit activity or importance in humans in large-scale trials. Our drug candidates are still in research and development, and we do not expect them to be commercially available for the foreseeable future, if at all. Only a small number of research and development programs ultimately result in commercially successful drugs. Potential products that appear to be promising at early stages of development may not reach the market for a number of reasons. These include the possibility that the potential products may:

be found ineffective or cause harmful side effects during preclinical studies or clinical trials;

fail to receive necessary regulatory approvals;

be precluded from commercialization by proprietary rights of third parties;

be difficult to manufacture on a large scale; or

be uneconomical or otherwise fail to achieve market acceptance.

If any of these potential problems occurs, we may never successfully market Tß4-based products.

We are subject to intense government regulation, and we may not receive regulatory approvals for our drug candidates.

Our product candidates will require regulatory approvals prior to sale. In particular, therapeutic agents are subject to stringent approval processes, prior to commercial marketing, by the FDA and by comparable agencies in most foreign countries. The process of obtaining FDA and corresponding foreign approvals is costly and time-consuming, and we cannot assure you that such approvals will be granted. Also, the regulations we are subject to change frequently and such changes could cause delays in the development of our product candidates.

Three of our drug candidates are currently in the clinical development stage, and we cannot be certain that we or our collaborators will successfully complete the clinical trials necessary to receive regulatory product approvals. The regulatory approval process is lengthy, unpredictable and expensive. To obtain regulatory approvals in the United States, we or a collaborator must ultimately demonstrate to the satisfaction of the FDA that our product candidates are sufficiently safe and effective for their proposed administration to humans. Many factors, known and unknown, can adversely impact clinical trials and the ability to evaluate a product candidate’s safety and efficacy, including:

the FDA or other health regulatory authorities, or institutional review boards, or IRBs, do not approve a clinical trial protocol or place a clinical trial on hold;

suitable patients do not enroll in a clinical trial in sufficient numbers or at the expected rate, for reasons such as the size of the patient population, the proximity of patients to clinical sites, the eligibility criteria for the trial, the perceptions of investigators and patients regarding safety, and the availability of other treatment options;

clinical trial data is adversely affected by trial conduct or patient withdrawal prior to completion of the trial;

there may be competition with ongoing clinical trials and scheduling conflicts with participating clinicians;

patients experience serious adverse events, including adverse side effects of our drug candidates, for a variety of reasons that may or may not be related to our product candidates, including the advanced stage of their disease and other medical problems;

patients in the placebo or untreated control group exhibit greater than expected improvements or fewer than expected adverse events;

third-party clinical investigators do not perform the clinical trials on the anticipated schedule or consistent with the clinical trial protocol and good clinical practices, or other third-party organizations do not perform data collection and analysis in a timely or accurate manner;

service providers, collaborators or co-sponsors do not adequately perform their obligations in relation to the clinical trial or cause the trial to be delayed or terminated;

we are unable to obtain a sufficient supply of manufactured clinical trial materials;

regulatory inspections of manufacturing facilities, which may, among other things, require us or a co-sponsor to undertake corrective action or suspend the clinical trials, such as the clinical hold with respect to our Phase 2 clinical trial of RGN-352;

the interim results of the clinical trial are inconclusive or negative;

the clinical trial, although approved and completed, generates data that is not considered by the FDA or others to be clinically relevant or sufficient to demonstrate safety and efficacy; and

changes in governmental regulations or administrative actions affect the conduct of the clinical trial or the interpretation of its results.

There can be no assurance that our clinical trials will in fact demonstrate, to the satisfaction of the FDA and others, that our product candidates are sufficiently safe or effective. The FDA or we may also restrict or suspend our clinical trials at any time if it is believed that subjects participating in the trials are being exposed to unacceptable health risks.

Clinical trials for product candidates such as ours are often conducted with patients who have more advanced forms of a particular condition or other unrelated conditions. For example, in clinical trials for our product candidate RGN-137, we have studied patients who are not only suffering from chronic epidermal wounds but who are also older and much more likely to have other serious adverse conditions. During the course of treatment with our product candidates, patients could die or suffer other adverse events for reasons that may or may not be related to the drug candidate being tested. Further, and as a consequence that all of our drug candidates are based on Tß4, crossover risk exists such that a patient in one trial may be adversely impacted by one drug candidate, and that adverse event may have implications for our other trials and other drug candidates. However, even if unrelated to our product candidates, such adverse events can nevertheless negatively impact our clinical trials, and our business prospects would suffer.

These factors, many of which may be outside of our control, may have a negative impact on our business by making it difficult to advance product candidates or by reducing or eliminating their potential or perceived value. As a consequence, we may need to perform more or larger clinical trials than planned. Further, if we are forced to contribute greater financial and clinical resources to a study, valuable resources will be diverted from other areas of our business. If we fail to complete or if we experience material delays in completing our clinical trials as currently planned, or we otherwise fail to commence or complete, or experience delays in, any of our other present or planned clinical trials, including as a result of the actions of third parties upon which we rely for these functions, our ability to conduct our business as currently planned could materially suffer.

We may not successfully establish and maintain development and testing relationships with third-party service providers and collaborators, which could adversely affect our ability to develop our product candidates.

We have only limited resources, experience with and capacity to conduct requisite testing and clinical trials of our drug candidates. As a result, we rely and expect to continue to rely on third-party service providers and collaborators, including corporate partners, licensors and contract research organizations, or CROs, to perform a number of activities relating to the development of our drug candidates, including the design and conduct of clinical trials, and potentially the obtaining of regulatory approvals. For example, we currently rely on several third-party contractors to manufacture and formulate Tß4 into the product candidates used in our clinical trials, develop assays to assess Tß4’s effectiveness in complex biological systems, recruit clinical investigators and sites to participate in our trials, manage the clinical trial process and collect, evaluate and report clinical results.

We may not be able to maintain or expand our current arrangements with these third parties or maintain such relationships on favorable terms. Our agreements with these third parties may also contain provisions that restrict our ability to develop and test our product candidates or that give third parties rights to control aspects of our product development and clinical programs. In addition, conflicts may arise with our collaborators, such as conflicts concerning the interpretation of clinical data, the achievement of milestones, the interpretation of financial provisions or the ownership of intellectual property developed during the collaboration. If any conflicts arise with our existing or future collaborators, they may act in their self-interest, which may be adverse to our best interests. Any failure to maintain our collaborative agreements and any conflicts with our collaborators could delay or prevent us from developing our product candidates. We and our collaborators may fail to develop products covered by our present and future collaborations if, among other things:

we do not achieve our objectives under our collaboration agreements;

we or our collaborators are unable to obtain patent protection for the products or proprietary technologies we develop in our collaborations;

we are unable to manage multiple simultaneous product development collaborations;

our collaborators become competitors of ours or enter into agreements with our competitors;

we or our collaborators encounter regulatory hurdles that prevent commercialization of our product candidates; or

we develop products and processes or enter into additional collaborations that conflict with the business objectives of our other collaborators.

We also have less control over the timing and other aspects of our clinical trials than if we conducted the monitoring and supervision entirely on our own. Third parties may not perform their responsibilities for our clinical trials on our anticipated schedule or consistent with a clinical trial protocol or applicable regulations. We also rely on clinical research organizations to perform much of our data management and analysis. They may not provide these services as required or in a timely manner. If any of these parties do not meet deadlines or follow proper procedures, including procedures required by law, the preclinical studies and clinical trials may take longer than expected, may be delayed or may be terminated, which would have a materially negative impact on our product development efforts. If we were forced to find a replacement entity to perform any of our preclinical studies or clinical trials, we may not be able to find a suitable entity on favorable terms or at all. Even if we were able to find a replacement, resulting delays in the tests or trials may result in significant additional expenditures and delays in obtaining regulatory approval for drug candidates, which could have a material adverse impact on our results of operations and business prospects.

G-treeBNT Co., Ltd. has limited drug development experience.

In March 2014 we completed two licensing agreements for the development and commercialization of RGN-259 and RGN-137 in certain territories, with G-treeBNT, headquartered outside of Seoul, Korea. In January 2015 we entered into a Joint Venture Agreement with G-tree-BNT and entered into a license agreement with the Joint Venture, pursuant to which granted to the Joint Venture the right to develop and exclusively commercialize RGN-259 in the United States. Although we will share control of the Joint Venture with G-tree BNT, G-treeBNT will have greater control of over the Joint Venture than we will, meaning that G-treeBNT will have significant control over the commercialization of RGN-259.

Historically, G-treeBNT’s business focus has been in the IT software industry in Korea with strong IP positions addressing specific software tools and apps such as optimized multimedia software for smart phones. G-treeBNT made a strategic decision in November 2013 to expand into the biopharmaceutical business through selected strategic alliances with biopharmaceutical companies in the US and EU. The collaboration with RegeneRx is the first strategic investment in this initiative. While G-treeBNT has hired executives and staff with significant pharmaceutical experience, the company had no internal drug development experience. As a result, G-treeBNT may face more and different challenges in the development of these product candidates than would more established pharmaceutical companies.

We are subject to intense competition from companies with greater resources and more mature products, which may result in our competitors developing or commercializing products before or more successfully than we do.

We are engaged in a business that is highly competitive. Research and development activities for the development of drugs to treat indications within our focus are being sponsored or conducted by private and public research institutions and by major pharmaceutical companies located in the United States and a number of foreign countries. Most of these companies and institutions have financial and human resources that are substantially greater than our own and they have extensive experience in conducting research and development activities and clinical trials and in obtaining the regulatory approvals necessary to market pharmaceutical products that we do not have. As a result, they may develop competing products more rapidly that are safer, more effective, or have fewer side effects, or are less expensive, or they may develop and commercialize products that render our product candidates non-competitive or obsolete.

With respect to our product candidate RGN-259, there are also numerous ophthalmic companies developing drugs for corneal wound healing and other outside-of-the-eye diseases and injuries. Amniotic membranes have been successfully used to treat corneal wounds in certain cases, as have topical steroids and antibacterial agents.

We have initially targeted our product candidate RGN-352 for cardiovascular indications. Most large pharmaceutical companies and many smaller biomedical companies are vigorously pursuing the development of therapeutics to treat patients after heart attacks and for other cardiovascular indications.

With respect to our product candidate RGN-137 for wound healing, Johnson & Johnson has previously marketed Regranex™ for this purpose in patients with diabetic foot ulcers. Other companies, such as Novartis, are developing and marketing artificial skins, which we believe could also compete with RGN-137. Moreover, wound healing is a large and highly fragmented marketplace attracting many companies, large and small, to develop products for treating acute and chronic wounds, including, for example, honey-based ointments, hyperbaric oxygen therapy, and low frequency cavitational ultrasound.

We are also developing potential cosmeceutical products, which are loosely defined as products that bridge the gap between cosmetics and pharmaceuticals, for example, by improving skin texture and reducing the appearance of aging. This industry is intensely competitive, with potential competitors ranging from large multinational companies to very small specialty companies. New cosmeceutical products often have a short product life and are frequently replaced with newer products developed to address the latest trends in appearance and fashion. We may not be able to adapt to changes in the industry as quickly as larger and more experienced cosmeceutical companies. Further, larger cosmetics companies have the financial and marketing resources to effectively compete with smaller companies like us in order to sell products aimed at larger markets.

Even if approved for marketing, our technologies and product candidates are unproven and they may fail to gain market acceptance.

Our product candidates, all of which are based on the molecule Tß4, are new and unproven and there is no guarantee that health care providers or patients will be interested in our product candidates, even if they are approved for use. If any of our product candidates are approved by the FDA, our success will depend in part on our ability to demonstrate sufficient clinical benefits, reliability, safety, and cost effectiveness of our product candidates relative to other approaches, as well as on our ability to continue to develop our product candidates to respond to competitive and technological changes. If the market does not accept our product candidates, when and if we are able to commercialize them, then we may never become profitable. Factors that could delay, inhibit or prevent market acceptance of our product candidates may include:

the timing and receipt of marketing approvals;

the safety and efficacy of the products;

the emergence of equivalent or superior products;

the cost-effectiveness of the products; and

ineffective marketing.

It is difficult to predict the future growth of our business, if any, and the size of the market for our product candidates because the markets are continually evolving. There can be no assurance that our product candidates will prove superior to products that may currently be available or may become available in the future or that our research and development activities will result in any commercially profitable products.

We have no marketing experience, sales force or distribution capabilities. If our product candidates are approved, and we are unable to recruit key personnel to perform these functions, we may not be able to commercialize them successfully.

Although we do not currently have any marketable products, our ability to produce revenues ultimately depends on our ability to sell our product candidates if and when they are approved by the FDA and other regulatory authorities. We currently have no experience in marketing or selling pharmaceutical products, and we do not have a marketing and sales staff or distribution capabilities. Developing a marketing and sales force is also time-consuming and could delay the launch of new products or expansion of existing product sales. In addition, we will compete with many companies that currently have extensive and well-funded marketing and sales operations. If we fail to establish successful marketing and sales capabilities or fail to enter into successful marketing arrangements with third parties, our ability to generate revenues will suffer.

If we enter markets outside the United States our business will be subject to political, economic, legal and social risks in those markets, which could adversely affect our business.

There are significant regulatory and legal barriers to entering markets outside the United States that we must overcome if we seek regulatory approval to market our product candidates in countries other than the United States. We would be subject to the burden of complying with a wide variety of national and local laws, including multiple and possibly overlapping and conflicting laws. We also may experience difficulties adapting to new cultures, business customs and legal systems. Any sales and operations outside the United States would be subject to political, economic and social uncertainties including, among others:

changes and limits in import and export controls;

increases in custom duties and tariffs;

changes in currency exchange rates;

economic and political instability;

changes in government regulations and laws;

absence in some jurisdictions of effective laws to protect our intellectual property rights; and

currency transfer and other restrictions and regulations that may limit our ability to sell certain product candidates or repatriate profits to the United States.

Any changes related to these and other factors could adversely affect our business if and to the extent we enter markets outside the United States. Additionally, we have entered into license agreements with Sigma-Tau Spa, Lee’s Pharmaceutical Limited and G-treeBNT for the development of certain of our product candidates in international markets. As a result, these development activities will be subject to compliance in all respects with local laws and regulations and may be subject to many of the risks described above.

Governmental and third-party payors may subject any product candidates we develop to sales and pharmaceutical pricing controls that could limit our product revenues and delay profitability.

The successful commercialization of our product candidates, if they are approved by the FDA, will likely depend on our ability to obtain reimbursement for the cost of the product and treatment. Government authorities, private health insurers and other organizations, such as health maintenance organizations, are increasingly seeking to lower the prices charged for medical products and services. Also, the trend toward managed health care in the United States, the growth of healthcare maintenance organizations, and recently enacted legislation reforming healthcare and proposals to reform government insurance programs could have a significant influence on the purchase of healthcare services and products, resulting in lower prices and reducing demand for our product candidates. The cost containment measures that healthcare providers are instituting and any healthcare reform could reduce our ability to sell our product candidates and may have a material adverse effect on our operations. We cannot assure you that reimbursement in the United States or foreign countries will be available for any of our product candidates, and that any reimbursement granted will be maintained, or that limits on reimbursement available from third-party payors will not reduce the demand for, or the price of, our product candidates. The lack or inadequacy of third-party reimbursements for our product candidates would decrease the potential profitability of our operations. We cannot forecast what additional legislation or regulation relating to the healthcare industry or third-party coverage and reimbursement may be enacted in the future, or what effect the legislation or regulation would have on our business.

We have no manufacturing or formulation capabilities and are dependent upon third-party suppliers to provide us with our product candidates. If these suppliers do not manufacture our product candidates in sufficient quantities, at acceptable quality levels and at acceptable cost, or if we are unable to identify suitable replacement suppliers if needed, our clinical development efforts could be delayed, prevented or impaired.

We do not own or operate manufacturing facilities and have little experience in manufacturing pharmaceutical products. We currently rely, and expect to continue to rely, primarily on peptide manufacturers to supply us with Tß4 for further formulation into our product candidates. We have historically engaged three separate smaller drug formulation contractors for the formulation of clinical grade product candidates, one for each of our three product candidates in clinical development, although, as described in this report, the contractor we engaged for RGN-352 has filed for bankruptcy and closed its manufacturing facility, and our clinical trial involving RGN-352 has been placed on clinical hold. We currently do not have an alternative source of supply for either Tß4 or the individual drug candidates. If these suppliers, together or individually, are not able to supply us with either Tß4 or individual product candidates on a timely basis, in sufficient quantities, at acceptable levels of quality and at a competitive price, or if we are unable to identify a replacement manufacturer to perform these functions on acceptable terms as needed, our development programs could be seriously jeopardized.

The clinical hold on our RGN-352 trial will require us to have new material manufactured by a cGMP-compliant manufacturer in the event that we seek to resume this trial. Significant preparatory time and procedures will be required before any new manufacturer would be able to manufacture RGN-352 for the AMI trial, due to the time required for revalidation of processes and assays related to such production that were already in place with the original manufacturer. Since we are unable to estimate the length of time that the trial will be on clinical hold, we have elected to cease activities on this trial until the FDA clinical hold is resolved and the requisite funding might be secured.

Other risks of relying solely on single suppliers for each of our product candidates include:

the possibility that our other manufacturers, and any new manufacturer that we may identify for RGN-352, may not be able to ensure quality and compliance with regulations relating to the manufacture of pharmaceuticals;

their manufacturing capacity may not be sufficient or available to produce the required quantities of our product candidates based on our planned clinical development schedule, if at all;

they may not have access to the capital necessary to expand their manufacturing facilities in response to our needs;

commissioning replacement suppliers would be difficult and time-consuming;

individual suppliers may have used substantial proprietary know-how relating to the manufacture of our product candidates and, in the event we must find a replacement or supplemental supplier, our ability to transfer this know-how to the new supplier could be an expensive and/or time-consuming process;

an individual supplier may experience events, such as a fire or natural disaster, that force it to stop or curtail production for an extended period;

an individual supplier could encounter significant increases in labor, capital or other costs that would make it difficult for them to produce our products cost-effectively; or

an individual supplier may not be able to obtain the raw materials or validated drug containers in sufficient quantities, at acceptable costs or in sufficient time to complete the manufacture, formulation and delivery of our product candidates.

Our suppliers may use hazardous and biological materials in their businesses. Any claims relating to improper handling, storage or disposal of these materials could be time-consuming and costly to us, and we are not insured against such claims.

Our product candidates and processes involve the controlled storage, use and disposal by our suppliers of certain hazardous and biological materials and waste products. We and our suppliers and other collaborators are subject to federal, state and local regulations governing the use, manufacture, storage, handling and disposal of materials and waste products. Even if we and these suppliers and collaborators comply with the standards prescribed by law and regulation, the risk of accidental contamination or injury from hazardous materials cannot be completely eliminated. In the event of an accident, we could be held liable for any damages that result, and we do not carry insurance for this type of claim. We may also incur significant costs to comply with current or future environmental laws and regulations.

We face the risk of product liability claims, which could adversely affect our business and financial condition.

We may be subject to product liability claims as a result of our testing, manufacturing, and marketing of drugs. In addition, the use of our product candidates, when and if developed and sold, will expose us to the risk of product liability claims. Product liability may result from harm to patients using our product candidates, such as a complication that was either not communicated as a potential side effect or was more extreme than anticipated. We require all patients enrolled in our clinical trials to sign consents, which explain various risks involved with participating in the trial. However, patient consents provide only a limited level of protection, and it may be alleged that the consent did not address or did not adequately address a risk that the patient suffered. Additionally, we will generally be required to indemnify our clinical product manufacturers, clinical trial centers, medical professionals and other parties conducting related activities in connection with losses they may incur through their involvement in the clinical trials.

Our ability to reduce our liability exposure for human clinical trials and commercial sales, if any, of Tß4 is dependent in part on our ability to obtain sufficient product liability insurance or to collaborate with third parties that have adequate insurance. Although we intend to obtain and maintain product liability insurance coverage if we gain approval to market any of our product candidates, we cannot guarantee that product liability insurance will continue to be available to us on acceptable terms, or at all, or that its coverage will be sufficient to cover all claims against us. A product liability claim, even one without merit or for which we have substantial coverage, could result in significant legal defense costs, thereby potentially exposing us to expenses significantly in excess of our revenues, as well as harm to our reputation and distraction of our management.

If any of our key employees discontinue their services with us, our efforts to develop our business may be delayed.

We are highly dependent on the principal members of our management team. The loss of our chairman and chief scientific advisor, Allan Goldstein, or chief executive officer, J.J. Finkelstein could prevent or significantly delay the achievement of our goals. We cannot assure you that Dr. Goldstein or Mr. Finkelstein, or any other key employees or consultants, will not elect to terminate their employment or consulting arrangements. In addition, we do not maintain a key man life insurance policy with respect to any of our management personnel. In the future, we anticipate that we will also need to add additional management and other personnel. Competition for qualified personnel in our industry is intense, and our success will depend in part on our ability to attract and retain highly skilled personnel. We cannot assure you that our efforts to attract or retain such personnel will be successful.

Mauro Bove, a member of our Board, was also a director and officer of entities affiliated with Sigma-Tau and is a director of Lee’s Pharmaceuticals, relationships which could give rise to a conflict of interest for Mr. Bove.

Mauro Bove is a member of our Board of Directors, and, until March 31, 2014, was also a director and officer of entities affiliated with Sigma-Tau, which collectively make up our largest stockholder group. At this time Mr. Bove remains engaged with Sigma-Tau as a consultant. Sigma-Tau has provided us with significant funding, may continue doing so in the future, and is also our strategic partner in Europe with respect to the development of certain of our drug candidates. We have issued shares of common stock, convertible promissory notes and common stock warrants to Sigma-Tau and its affiliates in several private placement financing transactions, including as recently as September 2013. We have licensed certain rights to our product candidates generally for the treatment of dermal and internal wounds to Sigma-Tau. Under the license agreement, upon the completion of a Phase 2 clinical trial of either of these product candidates that yields positive results in terms of clinical efficacy and safety, Sigma-Tau is obligated to either make a $5 million milestone payment to us or to initiate and fund a pivotal Phase 3 clinical trial of the product candidate. In 2009, we completed two Phase 2 clinical trials of RGN-137, but these trials were not sufficient to trigger the milestone obligation. There can be no assurance that we will ever receive this payment or be able to initiate a pivotal Phase 3 clinical trial of RGN-137 that would be funded by Sigma-Tau. As a result of Mr. Bove’s relationship with Sigma-Tau, there could be a conflict of interest between Sigma-Tau and our other stockholders with respect to these and other agreements and circumstances that may require the exercise of the Board’s discretion with respect to Sigma-Tau. Any decision in the best interests of Sigma-Tau may not be in the best interest of our other stockholders.

Additionally, Mr. Bove is a non-executive director of Lee’s Pharmaceuticals, in which affiliates of Sigma-Tau have a significant equity interest. In July 2012, we entered into a license agreement for TB4 in any pharmaceutical form, including our RGN-259, RGN-352 and RGN-137 product candidates for development in China, Hong Kong, Macau and Taiwan. There can be no assurance that we will ever receive any further payments from Lee’s under the agreement. As a result of Mr. Bove’s relationship with Lee’s and Sigma-Tau, Mr. Bove may have interests that are different from our other stockholders in connection with these and other agreements and circumstances that may require the exercise of the Board’s discretion with respect to Lee’s or Sigma-Tau. These conflicts could result in decisions that are not in the best interest of our other stockholders.

Risks Related To Our Intellectual Property

We are partially reliant on our license from the National Institutes of Health for the rights to Tß4, and any loss of these rights could adversely affect our business.

We have received an exclusive worldwide license to intellectual property discovered at the National Institutes of Health, or NIH, pertaining to the use of Tß4 in wound healing and tissue repair. The intellectual property rights from this license, along with independent patent applications we have filed, as well as patents and patent applications under licenses we acquired, form the basis for our current commercial development focus with Tß4. The NIH license terminates upon the last to expire of the patent applications that are filed, or any patents that may issue from such applications, in connection with the license. This license requires us to pay a minimum annual royalty to the NIH, regardless of the success of our product development efforts, plus certain other royalties upon the sale of products created by the intellectual property granted under the license. In 2013 we amended certain provisions of the exclusive license; we were permitted to credit amounts paid to prosecute or maintain the licensed patent rights during the 2013 calendar year against the 2013 minimum annual royalty of $25,000. Beginning in 2014 the minimum annual royalty is $2,000. While to date we believe that we have complied with all requirements to maintain the license, the loss of this license could have an adverse effect on our business and business prospects.

We may not be able to maintain broad patent protection for our product candidates, which could limit the commercial potential of our product candidates.

Our success will depend in part on our ability to obtain, defend and enforce patents, both in the United States and abroad. We have attempted to create a substantial intellectual property portfolio, submitting patent applications for various compositions of matter, methods of use and fragments and derivatives of Tß4. As described elsewhere in this report, we currently do not have adequate financial resources to fund our ongoing business activities substantially beyond 12 months without additional funding. As a result of our current financial condition, we continuously evaluate our issued patents and patent applications and may decide to limit their therapeutic and/or geographic coverage in an effort to enhance our ability to focus on certain medical conditions and countries within our financial constraints. As a result, we may not be able to protect our intellectual property rights in indications and/or territories that we otherwise would, and, therefore, our ability to commercialize Tß4, if at all, could be substantially limited, which could have a material adverse impact on our future results of operations.

If we are not able to maintain adequate patent protection for our product candidates, we may be unable to prevent our competitors from using our technology or technology that we license.

Our success will depend in substantial part on our ability to obtain, defend and enforce patents, maintain trade secrets and operate without infringing upon the proprietary rights of others, both in the United States and abroad. Pursuant to an exclusive worldwide license from the NIH, we have exclusive rights to use Tß4 in the treatment of non-healing wounds. While patents covering our use of Tß4 have issued in some countries, we cannot guarantee whether or when corresponding patents will be issued, or the scope of any patents that may be issued, in other countries. We have attempted to create a substantial intellectual property portfolio, submitting patent applications for various compositions of matter, methods of use and fragments and derivatives of Tß4. We have also in-licensed other intellectual property rights from third parties that could be subject to the same risks as our own patents. If any of these patent applications do not issue, or do not issue in certain countries, or are not enforceable, the ability to commercialize Tß4 in various medical indications could be substantially limited or eliminated.

In addition, the patent positions of the products being developed by us and our collaborators involve complex legal and factual uncertainties. As a result, we cannot assure you that any patent applications filed by us, or by others under which we have rights, will result in patents being issued in the United States or foreign countries. In addition, there can be no assurance that any patents will be issued from any pending or future patent applications of ours or our collaborators, that the scope of any patent protection will be sufficient to provide us with competitive advantages, that any patents obtained by us or our collaborators will be held valid if subsequently challenged or that others will not claim rights in or ownership of the patents and other proprietary rights we or our collaborators may hold. Unauthorized parties may try to copy aspects of our product candidates and technologies or obtain and use information we consider proprietary. Policing the unauthorized use of our proprietary rights is difficult. We cannot guarantee that no harm or threat will be made to our or our collaborators’ intellectual property. In addition, changes in, or different interpretations of, patent laws in the United States and other countries may also adversely affect the scope of our patent protection and our competitive situation.

Due to the significant time lag between the filing of patent applications and the publication of such patents, we cannot be certain that our licensors were the first to file the patent applications we license or, even if they were the first to file, also were the first to invent, particularly with regards to patent rights in the United States. In addition, a number of pharmaceutical and biotechnology companies and research and academic institutions have developed technologies, filed patent applications or received patents on various technologies that may be related to our product candidates. Some of these technologies, applications or patents may conflict with our or our licensors’ technologies or patent applications. A conflict could limit the scope of the patents, if any, that we or our licensors may be able to obtain or result in denial of our or our licensors’ patent applications. If patents that cover our activities are issued to other companies, we may not be able to develop or obtain alternative technology.

Additionally, there is certain subject matter that is patentable in the United States but not generally patentable outside of the United States. Differences in what constitutes patentable subject matter in various countries may limit the protection we can obtain outside of the United States. For example, methods of treating humans are not patentable in many countries outside of the United States. These and other issues may prevent us from obtaining patent protection outside of the United States, which would have a material adverse effect on our business, financial condition and results of operations.

Changes to U.S. patent laws could materially reduce any value our patent portfolio may have.

The value of our patents depends in part on their duration. A shorter period of patent protection could lessen the value of our rights under any patents that may be obtained and may decrease revenues derived from its patents. For example, the U.S. patent laws were previously amended to change the term of patent protection from 17 years following patent issuance to 20 years from the earliest effective filing date of the application. Because the time from filing to issuance of biotechnology applications may be more than three years depending on the subject matter, a 20-year patent term from the filing date may result in substantially shorter patent protection. Future changes to patent laws could shorten our period of patent exclusivity and may decrease the revenues that we might derive from the patents and the value of our patent portfolio.

We may not have adequate protection for our unpatented proprietary information, which could adversely affect our competitive position.

In addition to our patents, we also rely on trade secrets, know-how, continuing technological innovations and licensing opportunities to develop and maintain our competitive position. However, others may independently develop substantially equivalent proprietary information and techniques or otherwise gain access to our trade secrets or disclose our technology. To protect our trade secrets, we may enter into confidentiality agreements with employees, consultants and potential collaborators. However, we may not have such agreements in place with all such parties and, where we do, these agreements may not provide meaningful protection of our trade secrets or adequate remedies in the event of unauthorized use or disclosure of such information. Also, our trade secrets or know-how may become known through other means or be independently discovered by our competitors. Any of these events could prevent us from developing or commercializing our product candidates.

We may be subject to claims that we or our employees have wrongfully used or disclosed alleged trade secrets of former employers.

As is commonplace in the biotechnology industry, we employ now, and may hire in the future, individuals who were previously employed at other biotechnology or pharmaceutical companies, including competitors or potential competitors. Although there are no claims currently pending against us, we may be subject to claims that we or certain employees have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of former employers. Litigation may be necessary to defend against these claims. Even if we are successful in defending against these claims, litigation could result in substantial costs and would be a significant distraction to management.

Risks Related To Our Securities

Our common stock price is volatile, our stock is highly illiquid, and any investment in our securities could decline substantially in value.

For the period from January 1, 2014 through May 8, 2015 the closing price of our common stock has ranged from $0.08 to $0.58, with an average daily trading volume of approximately 99,000 shares. In light of our small size and limited resources, as well as the uncertainties and risks that can affect our business and industry, our stock price is expected to continue to be highly volatile and can be subject to substantial drops, with or even in the absence of news affecting our business. The following factors, in addition to the other risk factors described in this report, and the potentially low volume of trades in our common stock since it is not listed on a national securities exchange, may have a significant impact on the market price of our common stock, some of which are beyond our control:

results of pre-clinical studies and clinical trials;

commercial success of approved products;

corporate partnerships;

technological innovations by us or competitors;

changes in laws and government regulations both in the U.S. and overseas;

changes in key personnel at our company;

developments concerning proprietary rights, including patents and litigation matters;

public perception relating to the commercial value or safety of any of our product candidates;

other issuances of our common stock, or securities convertible into or exercisable for our common stock, causing dilution;

anticipated or unanticipated changes in our financial performance;

general trends related to the biopharmaceutical and biotechnological industries; and

general conditions in the stock market.

The stock market in general has recently experienced relatively large price and volume fluctuations. In particular, the market prices of securities of smaller biotechnology companies have experienced dramatic fluctuations that often have been unrelated or disproportionate to the operating results of these companies. Continued market fluctuations could result in extreme volatility in the price of our common stock, which could cause a decline in its value. You should also be aware that price volatility may be worse if the trading volume of the common stock remains limited or declines.

Our principal stockholders have significant voting power and may take actions that may not be in the best interests of our other stockholders.

Our officers, directors and principal stockholders together control approximately 53% of our outstanding common stock. Included in this group is Sigma-Tau and its affiliates, which together hold outstanding shares representing approximately 30% of our outstanding common stock and G-treeBNT which owns approximately 19% of our outstanding common stock. These stockholders also hold options, warrants, convertible promissory notes and stock purchase rights that provide them with the right to acquire significantly more shares of common stock. Accordingly, if these stockholders acted together they could control the outcome of all stockholder votes. This concentration of ownership may have the effect of delaying or preventing a change in control and might adversely affect the market price of our common stock, and therefore may not be in the best interest of our other stockholders.

If securities or industry analysts do not publish research or reports or publish unfavorable research about our business, the price of our common stock and other securities and their trading volume could decline.

The trading market for our common stock and other securities will depend in part on the research and reports that securities or industry analysts publish about us or our business. We do not currently have and may never obtain research coverage by securities and industry analysts. If securities or industry analysts do not commence or maintain coverage of us, the trading price for our common stock and other securities would be negatively affected. In the event we obtain securities or industry analyst coverage, if one or more of the analysts who covers us downgrades our securities, the price of our securities would likely decline. If one or more of these analysts ceases to cover us or fails to publish regular reports on us, interest in the purchase of our securities could decrease, which could cause the price of our common stock and other securities and their trading volume to decline.

The exercise of options and warrants, conversion of convertible promissory notes, and other issuances of shares of common stock or securities convertible into common stock will dilute your interest.

As of March 31, 2015, there were outstanding options to purchase an aggregate of 6,588,711 shares of our common stock under our 2000 and 2010 incentive equity plans at exercise prices ranging from $0.14 per share to $3.21 per share and outstanding warrants to purchase 8,603,048 shares of our common stock at a weighted average exercise price of $0.48 per share. In addition to the outstanding options and warrants we have also issued five series of convertible promissory notes which are presently convertible into an aggregate of 13,683,334 shares of our common stock. In October 2012, we sold convertible promissory notes totaling $300,000 that are convertible into 2,000,000 shares of common stock at a conversion price of $0.15 per share. In October 2014 the maturity date of these notes was extended for an additional three years. In 2013, we sold three additional series of convertible promissory notes, which notes totaled $646,000 and are initially convertible into 10,766,667 shares of common stock at a conversion price of $0.06 per share. In January 2014, we sold a fifth series of convertible promissory notes, which notes totaled $55,000 and are initially convertible into 916,667 shares of common stock at a conversion price of $0.06 per share. The notes issued in 2013 and January 2014 contain down round provisions under which the conversion prices of these notes could be decreased as a result of future equity offerings below the conversion price of the notes. Pursuant to the March 2014 agreements with G-treeBNT, G-treeBNT had an option to purchase an additional 5.5 million shares of common stock at $0.15 per share on or before January 31, 2015. This option was not exercised and the option has expired. The exercise of options and warrants or note conversions at prices below the market price of our common stock could adversely affect the price of shares of our common stock. Additional dilution may result from the issuance of shares of our capital stock in connection with collaborations or manufacturing arrangements or in connection with other financing efforts.

Any issuance of our common stock that is not made solely to then-existing stockholders proportionate to their interests, such as in the case of a stock dividend or stock split, will result in dilution to each stockholder by reducing his, her or its percentage ownership of the total outstanding shares. Moreover, if we issue options or warrants to purchase our common stock in the future and those options or warrants are exercised or we issue restricted stock, stockholders may experience further dilution. Holders of shares of our common stock have no preemptive rights that entitle them to purchase their pro rata share of any offering of shares of any class or series.

In addition, most of the outstanding warrants to purchase shares of our common stock have an exercise price above the current market price for our common stock. As a result, these warrants may not be exercised prior to their expiration, in which case we would not realize any proceeds from their exercise.

Our certificate of incorporation and Delaware law contain provisions that could discourage or prevent a takeover or other change in control, even if such a transaction would be beneficial to our stockholders, which could affect our stock price adversely and prevent attempts by our stockholders to replace or remove our current management.

Our certificate of incorporation provides our Board with the power to issue shares of preferred stock without stockholder approval. In addition, we are subject to the anti-takeover provisions of Section 203 of the Delaware General Corporation Law. Subject to specified exceptions, this section provides that a corporation may not engage in any business combination with any interested stockholder, as defined in that statute, during the three-year period following the time that such stockholder becomes an interested stockholder. This provision could also have the effect of delaying or preventing a change of control of our company. The foregoing factors could reduce the price that investors or an acquirer might be willing to pay in the future for shares of our common stock.

We may become involved in securities class action litigation that could divert management’s attention and harm our business and our insurance coverage may not be sufficient to cover all costs and damages.

The stock market has from time to time experienced significant price and volume fluctuations that have affected the market prices for the common stock of pharmaceutical and biotechnology companies. These broad market fluctuations may cause the market price of our common stock to decline. In the past, following periods of volatility in the market price of a particular company’s securities, securities class action litigation has often been brought against that company. We may become involved in this type of litigation in the future. Litigation often is expensive and diverts management’s attention and resources, which could hurt our business, operating results and financial condition.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.

Defaults Upon Senior Securities

None.

Item 4.

Mine Safety Disclosures

Not applicable.

Item 5.

Other Information

None.

Item 6.

Exhibits

Exhibit No.	Description of Exhibit	Reference*

3.1	Restated Certificate of Incorporation	Exhibit 3.1 to Registration Statement on Form S-1 (File No. 333-166146) (filed April 16, 2010)

3.2	Certificate of Amendment to Restated Certificate of Incorporation	Exhibit 3.2 to Registration Statement on Form S-1 (File No. 333-166146) (filed April 16, 2010)

3.3	Certificate of Amendment to Restated Certificate of Incorporation	Exhibit 3.3 to Registration Statement on Form S-1 (File No. 333-166146) (filed April 16, 2010)

3.4	Certificate of Amendment to Restated Certificate of Incorporation	Exhibit 3.4 to Registration Statement on Form S-8 (File No. 333-168252) (filed July 21, 2010)

3.5	Certificate of Designation of Series A Participating Cumulative Preferred Stock	Exhibit 3.4 to Registration Statement on Form S-1 (File No. 333-166146) (filed April 16, 2010)

3.6	Amended and Restated Bylaws	Exhibit 3.4 to the Company’s Quarterly Report on Form 10-Q (filed August 14, 2006)

3.7	Amendment to Amended and Restated Bylaws	Exhibit 3.6 to the Company’s Registration Statement on Form S-8 (File No. 333-152250) (filed July 10, 2008)

4.1	Specimen Common Stock Certificate	Exhibit 4.1 to Registration Statement on Form S-1 (File No. 333-166146) (filed April 16, 2010)

4.2	Specimen Rights Certificate	Exhibit 4.2 to Registration Statement on Form S-1 (File No. 333-166146) (filed April 16, 2010)

4.3	Rights Agreement, dated April 29, 1994, between the Company and American Stock Transfer & Trust Company, as Rights Agent	Exhibit 4.3 to Registration Statement on Form S-1 (File No. 333-166146) (filed April 16, 2010)

4.4	Amendment No. 1 to Rights Agreement, dated March 4, 2004, between the Company and American Stock Transfer & Trust Company, as Rights Agent	Exhibit 4.4 to Registration Statement on Form S-1 (File No. 333-166146) (filed April 16, 2010)

4.5	Warrant Agreement, dated May 21, 2010, between the Company and American Stock Transfer & Trust Company, as Warrant Agent	Exhibit 4.6 to Current Report on Form 8-K (File No. 001-15070) (filed May 21, 2010)

4.6	Form of Warrant Certificate	Exhibit 4.6 to Amendment No. 1 to Registration Statement on Form S-1 (File No. 333-166146) (filed May 17, 2010)

10.1	Joint Venture Agreement between the Company and G-treeBNT Co., Ltd., dated January 28, 2015	Filed herewith+

10.2	License Agreement between the Company and ReGenTree, LLC, dated January 28, 2015	Filed herewith+

31.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934	Filed herewith

32.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith**

101

The following materials from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Balance Sheets at March 31, 2013 and December 31, 2012; (ii) Condensed Statements of Operations for the three months ended March 31, 2013 and 2012; (iii) Condensed Statements of Cash Flows for the three months ended March 31, 2013 and 2012; and (iv) Notes to Condensed financial statements.

Filed herewith***

*		Except where noted, the exhibits referred to in this column have heretofore been filed with the Securities and Exchange Commission as exhibits to the documents indicated and are hereby incorporated by reference thereto. The Registration Statements referred to are Registration Statements of the Company.

**		This certification is being furnished solely to accompany this quarterly report pursuant to 18 U.S.C. Section 1350, is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934 and is not to be incorporated by reference into any filing of the registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

***		Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files included in Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those Sections.

+		Certain portions of this exhibit have been omitted pursuant to a request for confidential treatment under Rule 24b-2 of the Exchange Act. The entire exhibit has been separately filed with the Securities and Exchange Commission.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	RegeneRx Biopharmaceuticals, Inc.
	(Registrant)

Date: May 15, 2015	/s/J.J. Finkelstein
	J.J. Finkelstein
	President and Chief Executive Officer
	(On Behalf of the Registrant)

Exhibit 10.1

JOINT VENTURE AGREEMENT

This Joint Venture Agreement (this “ Agreement ”) dated and effective as of January 28, 2015 (the “ Effective Date ”), is entered into by and among:

G-treeBNT Co., Ltd. , a corporation organized under the laws of the Republic of Korea (“ Korea ”) with offices at 22 ^nd FL, Parkview Tower, 248 Jungjail-ro, Bundang-gu, Seongnam-si, Gyeonggi-do 463-863, Republic of Korea (“ G-treeBNT ”);

RegeneRx Biopharmaceuticals, Inc. , a company organized under the laws of the State of Delaware, with offices at 15245 Shady Grove Road, Suite 470, Rockville, Maryland, United States of America (the “ U.S. ”) (“ RegeneRx ”); and

ReGenTree, LLC , a Delaware limited liability company (the “ Company ”).

G-treeBNT, RegeneRx, and the Company are referred to individually as a “ Party ” and collectively as the “ Parties .”

RECITALS

WHEREAS, G-treeBNT is engaged in the business of developing, marketing, manufacturing, and distributing biopharmaceutical products;

WHEREAS, RegeneRx is engaged in the business of developing biopharmaceutical products, including the pre-clinical and clinical development and future commercialization of the Product (as defined below);

WHEREAS, the Parties desire to form the Company as a joint venture in order to develop and commercialize the Product for the ophthalmic field in the U.S.; and

WHEREAS, the Parties desire to enter into a written agreement providing for the formation of the Company and each Party’s rights and obligations with respect to the Company.

NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

Section 1. Definitions. As used in this Agreement, the following terms, whether used in the singular or plural, have the respective meanings set forth below. Capitalized terms used but not otherwise defined in this Agreement shall have the meanings ascribed to such terms in the License Agreement.

“ Affiliate ” shall mean, with respect to a Person, any Person that Controls, is Controlled by or is under common Control with such first Person. For purposes of this definition only, “ Control ” means (a) to possess, directly or indirectly, the power to direct the management or policies of a Person, whether through ownership of voting securities, or by contract relating to voting rights or corporate governance, or (b) to own, directly or indirectly, at least fifty percent (50%) of the outstanding voting securities or other ownership interest of such Person.

“ Agreement ” shall have the meaning given to such term in the Recitals.

“ Bankrupt Member ” shall have the meaning given to such term in Section 13.3.

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

“ Board ” shall mean the Board of Directors of the Company.

“ Business Day ” shall mean any day except Saturday, Sunday or any other day on which commercial banks located in New York City are authorized or required by law to be closed for business.

“ Cash Flow from Operations ” means all cash available to the Company from its ordinary course of business activities remaining after payment of current expenses, liabilities, debts or obligations of the Company.

“ CEO ” shall mean the President and Chief Executive Officer of the Company appointed pursuant to Section 8.1.

“ Certificate of Formation ” shall mean the Certificate of Formation of the Company, which is incorporated as part of this Agreement as Appendix A.

“ CFO ” shall mean the Chief Financial Officer of the Company appointed pursuant to Section 8.2.

“ Change of Control ” shall have the meaning provided in the License Agreement.

“ Change of Control Proceeds ” shall mean, with respect to any Change of Control of the Company and without duplication, all cash and the fair market value on the effective date of such Change of Control of all other property paid or payable by a Third Party to the Company and/or its Members in consideration for their equity interests in the Company.

“ Commercialization Committee ” shall mean the marketing and sales committee formed by G-treeBNT and RegeneRx consisting of employees, consultants, or directors from each Member to discuss and agree on the commercialization of the Product (as defined hereinafter) pursuant to the License Agreement.

“ Company ” shall have the meaning given to such term in the Recital.

“ Confidential Information ” shall have the meaning given to such term in the License Agreement.

“ Cumulative Net Taxable Income ” is determined at the end of the Company’s fiscal year with respect to which the Tax Amount is to be determined and is the sum of all taxable income for the current and all prior fiscal years reduced by the sum of all taxable losses for the current and all prior fiscal years.

“ DLLCA ” shall mean the Delaware Limited Liability Company Act, Del. Code Ann. tit. 6, § 18–101 et seq.

“ Development Committee ” shall have the meaning given to such term in the License Agreement.

“ Dry Eye Syndrome ” shall have the meaning given to such term in the License Agreement.

“ Effective Date ” shall have the meaning given to such term hereinbefore.

“ Effective Date of the License Agreement ” shall have the meaning given to such term in the License Agreement.

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

“ Effective Tax Rate ” is the highest U.S. corporate income tax rate for that year plus the federal tax-effected state and local income tax rate applicable in the state and jurisdiction of the principal office of the Company.

“ FDA ” shall mean the U.S. Food and Drug Administration or any successor U.S. governmental agency performing similar functions.

“ Field ” shall have the meaning given to such term in the License Agreement.

“ Final Milestone Event ” shall have the meaning given to such term in Section 9.1(d).

“ Governmental Authority ” shall mean: (i) any national, federal, provincial, state, municipal or other governmental body in any jurisdiction in the Territory or elsewhere, (ii) any international or multi-lateral body, (iii) any subdivision, ministry, department, secretariat, bureau, agency, commission, board, instrumentality or authority of any of the foregoing governments or bodies, (iv) any quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for any of the foregoing governments or bodies, or (v) any international, multi-lateral, or multi-national judicial, quasi-judicial, arbitration or administrative court, grand jury, tribunal, commission, board or panel, in each case having jurisdiction over the U.S.

“ Intellectual Property ” shall have the meaning given to such term in the License Agreement.

“ Inventions ” shall have the meaning given to such term in the License Agreement.

“ Joint Venture Period ” shall mean the period beginning on the Effective Date and ending on the date on which this Agreement is terminated in accordance with the provisions of Section 13.

“ Know-How ” shall have the meaning given to such term in the License Agreement.

“ Laws ” shall mean (i) all constitutions, treaties, laws, statutes, codes, ordinances, guidance, orders, decrees, rules, regulations, and municipal by-laws, whether domestic or international, anywhere in the Territory or as may otherwise be agreed in writing among the Parties, (ii) all judgments, orders, writs, injunctions, decisions, rulings, decrees and awards of any Governmental Authority, and (iii) all policies, practices and guidelines of any Governmental Authority.

“ License Agreement ” shall mean that certain license agreement between the Company and RegeneRx, a copy of which is attached hereto as Appendix B , as amended from time to time.

“ Members ” shall mean members of the Company, which are G-treeBNT and RegeneRx.

“ Milestone Event ” shall have the meaning given to such term in Section 9.1.

“ NDA ” shall mean the New Drug Application which is the vehicle through which drug sponsors formally propose that the FDA approve a new pharmaceutical for sale and marketing in the U.S.

“ Other Available Cash ” means cash generated by the Company’s activities outside its ordinary course of business activities.

“ Pan Asia License Agreement ” shall have the meaning ascribed to such term in the License Agreement.

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

“ Patents ” shall have the meaning given to such term in the License Agreement.

“ Person ” shall mean an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or other similar entity or organization, including a government or political subdivision, department or agency of a government.

“ Product ” shall have the meaning given to such term in the License Agreement.

“ Tβ4 ” shall have the meaning given to such term in the License Agreement.

“ Tax Amount ” is the product of (i) the Effective Tax Rate and (ii) the Company’s Cumulative Net Taxable Income. The Tax Amount will not be in excess of the product of (A) the Effective Tax Rate and (B) the Company’s taxable income for the fiscal year of the determination.

“ Territory ” shall have the meaning given to such term in the License Agreement.

“ Third Party ” shall mean any Person other than the Company, G-treeBNT, RegeneRx, and Affiliates of either such Party.

“ Trademark ” shall have the meaning given to such term in the License Agreement.

“ Transfer ” shall have the meanings given to such term in Section 3.2.

“ US$ ” shall mean the U.S. Dollar, the lawful currency of the U.S.

Section 2. Establishment of the Company

2.1 Purpose . The purpose of the Company is to develop and commercialize the Product for the Field in the Territory.

2.2 Formation . The Company shall be a limited liability company (“ LLC ”) organized under the laws of the State of Delaware in the U.S. The name of the Company shall be “ ReGenTree, LLC ”.

2.3 Certificate of Formation . The Parties shall cause the Company to adopt the Certificate of Formation in the form as attached hereto as Appendix A , which shall be incorporated as part of this Agreement after the Effective Date. In the event any provision in the Certificate of Formation or any other charter document of the Company conflicts with any provision of this Agreement, the provision of this Agreement shall prevail, and the Parties shall cause the Certificate of Formation and any other governing documents of the Company to be amended accordingly upon mutual consultation.

2.4 Limited Liability Company Agreement . The Parties acknowledge and agree that this Agreement constitutes the Limited Liability Company Agreement of the Company under Section 18-101 of the DLLCA.

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

Section 3. Capital Stock; Transfer of Interests

3.1 Member’s interest in the Company’s Capital Stock and Future Profits . The Company shall have only one class of interest that the existing Members may own in its capital stock and profits. Percentage interests of Members shall be in accordance with Section 9.1.

3.2 Transfer Prohibited . Except as otherwise provided herein, each Member agrees to hold and not, directly or indirectly, to sell, transfer, pledge, encumber, assign or otherwise dispose of (“ Transfer ”) any of such Member’s interests in the Company or any right or interest therein throughout the Joint Venture Period, except for by a prior written consent of the other Member.

Section 4. Obligations of the Members

4.1 Obligations of G-treeBNT . G-treeBNT shall be solely responsible for providing all of the capital required for the Company to conduct its operations, including without limitation, fulfilling all of its obligations under the License Agreement. Without limiting the generality of the foregoing, G-treeBNT’s obligations shall include the following:

(a) G-treeBNT shall contribute installments of start-up capital and funding to the Company, as set forth in detail in Section 9.1;

(b) G-treeBNT shall provide all capital to the Company as necessary for the Company to develop the Product(s), including the conduct of all necessary clinical trials, process development, non-clinical studies, all regulatory filings and all other activities contemplated hereunder and under the License Agreement (including the Development Plan described therein), provided that G-treeBNT shall not be entitled to any additional percentage ownership or other equity in consideration for its obligation to provide such capital to the Company, except for the adjustments to its percentage ownership described in paragraphs (a) through (e) of Section 9.1 below;

(c) G-treeBNT shall share with the Company and its Members all of the data resulting from development of Products obtained and shall be obtained hereafter under the RGN-259 License Agreement dated March 7, 2014 between G-treeBNT and RegeneRx; and

(d) G-treeBNT shall cause the Company to design a development plan for development of the Products for Dry Eye Syndrome and Neurotrophic Keratopathy in the Territory that includes a description of the scope, approximate cost, and timeline for development.

4.2 Obligations of RegeneRx . RegeneRx shall perform the following obligations:

(a) RegeneRx shall execute and deliver the License Agreement; and

(b) RegeneRx shall provide all non-clinical and clinical data relating to the Product, which includes, without limitation, all of the data directly or indirectly necessary for the development, production, commercialization, or distribution of the Product in its possession at the time of creating the Company.

4.3 Joint Commercialization Committee . Just prior to initial regulatory approval from the FDA, the Members shall form the Commercialization Committee in order to oversee the development and execution of the Commercialization Plan (as defined in the License Agreement) and to form a mutual understanding on the marketing, distribution, and sales strategies of the Products and to provide guidance to the Company.

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Section 5. Allocation of Profits and Losses; Distributions

5.1 Shares of Profits and Losses . Each Member will share in the Company’s profits and losses in accordance with its interest in the Company. A Member’s share of the taxable income or loss or other tax items of the Company will be determined in accordance with Appendix C (Tax Provisions), which shall be incorporated as part of the Agreement after the Effective Date.

5.2 Distributions . Distributions are made in the following priority:

(a) Distribution of Tax Amount . At least ten (10) Business Days before each date when a U.S. corporate estimated income tax payment is due, the Company will distribute, from Cash Flow from Operations (or, if necessary, from Other Available Cash), to each Member its share of the Tax Amount estimated by the Company to have accrued during the estimated tax period before the distribution date. No later than sixty five (65) days after the end of the Company’s fiscal year, the Company will distribute, from Cash Flow from Operations (or, if necessary, from Other Available Cash), to each Member its share of any previously unpaid Tax Amount for such fiscal year.

(b) Reserves . The Chief Financial Officer will establish reserves from Cash Flow from Operations for:

(i) contingent or unforeseen obligations, debts or liabilities of the Company, as the Chief Financial Officer deems reasonably necessary;

(ii) amounts required by any contracts of the Company; and

(iii) such other purposes as decided upon by the Chief Financial Officer.

(c) The Balance . The Company will distribute the balance, if any, of Cash Flow from Operations to the Members in accordance with their percentage interest in the Company within ninety (90) days after the end of the Company’s fiscal year.

(d) Other Available Cash . Distributions of Other Available Cash are to be made in such amounts and at such times as determined by the Board of Directors. If there is not enough Cash Flow from Operations to make all the distributions provided for in this Section 5.2, Other Available Cash will be used to make the distributions in the priority specified in such Sections.

5.3 Allocation of Proceeds from Certain Transactions .

(a) Subject to Section 5.3(b) below, (i) any Sublicense Fees or Change of Control Proceeds paid or payable to the Company during the term of this Agreement shall be allocated between the Members in accordance with their then respective percentage ownership interests in the Company, and (ii) RegeneRx shall continue to be entitled to receive royalties in accordance with Section 5.1 of the License Agreement.

(b) Notwithstanding anything to the contrary contained in this Agreement, in the event a Change of Control of the Company occurs following achievement of the Final Milestone Event, then (i) RegeneRx shall be entitled to *** of all Change of Control Proceeds paid or payable in connection with such Change of Control, and G-treeBNT (and any additional or subsequent Members) shall be entitled to *** of such Change of Control Proceeds, and (ii) in consideration of the foregoing, RegeneRx will agree to forego all future rights to receive royalties on Net Sales under Section 5.1(a) and (b) of the License Agreement. RegeneRx agrees to execute and deliver any amendments to the License Agreement or such other instruments reasonably necessary to give effect to the foregoing clause (ii).

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5.4 No Priority . Except as otherwise provided in this Agreement, no Member will have priority over any other Member as to the return of capital, allocation of income or losses, or any distribution.

5.5 Other Distribution Rules . No Member will have the right to demand and receive property other than cash in payment for its share of any distribution. Distribution of non-cash property may be made with the consent of all Members. The preceding sentence expressly overrides the contrary provisions of DLLCA § 18–605 as to non-cash distributions.

5.6 Limitation upon Distributions . No distribution will be made to Members if prohibited by DLLCA § 18–607 or other applicable law.

Section 6. Company Governance

6.1 Operations. The Parties agree and acknowledge that G-treeBNT, in cooperation with RegeneRx, shall primarily be in charge of the operation of the Company subject to all governance requirements and shall primarily be responsible for creating, and solely responsible for funding, a plan to develop the Product in the Territory through an NDA approval and thereafter commercialize the Product in the Territory. Each Member agrees to take all actions necessary to ensure that the Company shall be operated in accordance with the terms of this Agreement including, without limitation, exercising its voting rights in the Company and causing any director(s) nominated by the Member to exercise their voting rights to effect the terms hereof and causing any officer(s) appointed by the Member to act in accordance with the terms hereof.

6.2 Board of Directors . The Board shall oversee the operations of the Company in a manner consistent with this Agreement. The Board shall be authorized to take all actions and make all decisions by resolution regarding all important matters relative to the management and operation of the Company. The Board will consist of three (3) directors who will be elected by the resolution of the Members Meeting. G-treeBNT shall have the right to nominate two (2) directors of the Board (“ G-treeBNT Directors ”), and RegeneRx shall have the right to nominate one (1) director of the Board (“ RegeneRx Director ”), in each case without regard to the change in percentage ownership contemplated in Section 9.1. Each Member shall exercise its voting rights in the Company and take such other steps to ensure the election of the nominees of G-treeBNT and RegeneRx as directors of the Company. If the position of a director becomes vacant for any reason, the Members shall cause their interests to be voted to elect as a substitute director a person nominated by the Member who nominated the director whose position has become vacant. If a nominating Member wishes to change any of its nominated director(s), whether with or without cause, the Members shall vote in accordance with the wishes of the nominating Member; provided, however, that the nominating Member shall indemnify and hold harmless the Company and the other Member from and against all damages and other expenses that may arise from such action. Each director shall have one (1) vote, and all resolutions shall be passed by a majority affirmative vote consistent with this Agreement except as provided in Section 6.4. Withdrawal or removal of a Board member shall be performed consistent with the Certificate of Formation. If a Member’s nominated director resigns or is removed from the Board, then only such Member may nominate a replacement for the departing director. Each Member, acting in its sole discretion, shall be entitled to remove a director nominated by such Member.

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6.3 Board Meetings and Actions. G-treeBNT shall appoint the chairman of the Board, who shall be one of the G-treeBNT Directors. The chairman of the Board shall convene meetings of the Board in the U.S. not less than once annually in such manner permitted by applicable law. The chairman shall send written notice at least seven (7) days in advance of such meetings to each director of the Board. Special Board meetings, however, may be called by any director at any time by reasonable prior written notice to all directors. Telephonic meetings of the Board may be held as necessary. A waiver of notice as to the time and place for any meeting may be executed by all of the directors of the Board. At least two (2) directors, including the RegeneRx Director, must be present to constitute a quorum. In the absence of a valid quorum at a meeting of the Board, duly convened, the meeting shall be adjourned to the same place not earlier than ten (10) business days but no later than twenty-one (21) business days thereafter as the Chairman may determine. The quorum requirement of the presence of the RegeneRx Director shall be waived for the meeting so adjourned. The Board may also act without conducting a formal meeting by the execution of a unanimous consent resolution that provides a summary description of the action to be taken and other pertinent information necessary to inform the directors entitled to vote on such matters. The G-treeBNT Directors and the RegeneRx Director may each invite additional representatives to attend any board meetings in a non-voting, observer capacity (each such individual an “ Observer ”), provided that the Parties may agree to withhold information from any Observer or exclude any Observer from the applicable portion of any Board meeting as the Parties determine necessary to protect the attorney-client privilege of the Company.

6.4 Matters Subject to Unanimous Board Approval . An affirmative vote by all three (3) of the directors of the Board then serving shall be required for any of the following:

(a) Authorize, create, or designate any new class or series of membership or equity units of the Company, issue any membership or equity interests in the Company, or grant any right to acquire any such equity units, except to the extent expressly contemplated by this Agreement;

(b) Admit a new Member of the Company;

(d) Consummate any transfer or license of Intellectual Property of the Company, including any sublicense or license of rights under the License Agreement;

(e) Abandon the Company’s rights to any Intellectual Property, including any discontinuation of prosecuting or maintaining any Patent;

(f) Make any material change in the nature of the Company’s business;

(g) Convert the Company to a different type of business entity;

(h) Engage in any dissolution or liquidation of the Company;

(i) Incur any indebtedness for borrowed money;

(j) Materially change the accounting or tax policies of the Company;

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(k) Enter into or amend any agreement or arrangement between the Company and G-treeBNT or an Affiliate of G-treeBNT;

(l) Amend this Agreement or the Certificate of Formation, limited liability company agreement, or other governing document of the Company; or

(m) Enter into any agreement with respect to any of the foregoing.

Section 7. Members Meeting

7.1 Members Meetings . The Company shall convene at least one Members meeting each calendar year in the U.S. which shall be held pursuant to the law of the State of Delaware and the Certificate of Formation at a time and place as determined by the Board.

7.2 Resolution . Except as otherwise required by applicable laws or this Agreement, all actions and resolutions at each meeting of Members may only be adopted by the affirmative vote of at least a majority of the interests in the Company entitled to vote present at the meeting, provided that the Members shall not take any action identified in Section 6.4 without the consent of all Members.

Section 8. Officers

8.1 CEO . G-treeBNT, subject to majority approval of the Board, shall have the right to appoint the CEO. Subject only to the resolutions of the Board, the CEO shall have rights of, including but not limited to, (i) being responsible for the direction, performance and supervision of the Company in accordance with the policies and procedures established by the Board; (ii) preparing budgets and reports relating to activities of the Company; and (iii) hiring and terminating the other employees of the Company as he or she deems necessary in accordance with guidelines established by the Board. Notwithstanding any other provisions of this Agreement, in no circumstances may the CEO, CFO, or any other officer, employee or agent of the Company, take any of the actions set forth in Section 6.4 without the prior approval of the Board.

8.2 CFO . G-treeBNT, subject to majority approval of the Board, shall have the right to appoint the CFO. The CFO shall be responsible for overseeing the financial affairs of the Company. The CFO shall report to the CEO.

8.3 Standard of Conduct . Each Officer, in managing the business or affairs of the Company, will discharge his or duties:

(a) in a manner he or she believes in good faith to be in the best interests of the Company;

(b) in a manner he or she believes in good faith to represent the care an ordinarily prudent person in a like position would exercise under similar circumstances;

(d) without intentional misconduct or a knowing violation of law; and

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(e) without engaging in any transaction for which he or she receives a personal benefit in violation or breach of any provision of this Agreement.

8.4 No Duty of Member s . No Member has any duty to the Company or any Member solely by reason of acting in its capacity as a Member, except to refrain from (i) any act or omission that constitutes a bad faith violation of the implied contractual covenant of good faith and fair dealing and (ii) any transaction in which the Member receives a personal benefit in violation or breach of any provision of this Agreement. Thus, without limiting the foregoing, a Member (A) does not violate any duty or obligation under this Agreement or under applicable law because the Member’s conduct furthers its interest and (B) has no duty or obligation to consider any interest of or effect on the Company or any other Person.

8.5 Term . Each officer will hold office until his or her death, resignation or removal. The Member who has authority to appoint any officer shall also have authority to remove such officer.

8.6 Compensation of Directors . The Company shall be solely responsible for payment of reasonable compensation to directors, which shall include reimbursement for out-of-pocket expenses.

Section 9. Percentage Ownership

9.1 Interest Percentage Ownership . The percentage ownership interest in the Company of the Members shall be adjusted, as set forth below, upon the achievement of the following milestones (each of the events triggering an adjustment in the percentage ownership of the Company as described in each of subsections (a), (b), (c), (d) and (e) of this Section 9.1 shall be referred to as a “ Milestone Event ”):

(a) Within forty-five (45) Business Days of the Effective Date, G-treeBNT shall make a capital contribution of US$3,000,000 to the Company (which capital contribution shall include the $1,000,000 payment to be made by the Company to RegeneRx pursuant to the License Agreement). Upon completion of such capital contribution of US$3,000,000, G-treeBNT and RegeneRx shall hold *** and *** of the total interests in the Company, respectively.

(b) Upon funding, initiation and completion of the Phase 2b study for Dry Eye Syndrome, the Members shall cause the Company to grant such number of new interests to G-treeBNT that the granting of the new interests shall cause G-treeBNT and RegeneRx to hold *** and ***, respectively, of the total interests in the Company. The Members acknowledge that completion of the Phase 2b study shall mean the point in time at which the final clinical study and statistical report from the Phase 2b study is completed, signed by the study sponsor and clinical research organization, and filed with the FDA.

(c) Upon funding, initiation and completion of the pivotal Phase 3 study for Dry Eye Syndrome, the Members shall cause the Company to grant such number of new interests to G-treeBNT that the granting of the new interests shall cause G-treeBNT and RegeneRx to hold *** and ***, respectively, of the total interests in the Company. The Members acknowledge that completion of the pivotal Phase 3 study shall mean the point in time at which the final clinical study and statistical report from the pivotal Phase 3 study is completed, signed by the study sponsor and clinical research organization, and filed with the FDA.

(d) Upon the approval by the FDA of an NDA approving marketing of the Product for Dry Eye Syndrome, the Members shall cause the Company to grant such new interests to G-treeBNT that the granting of the new interests shall cause G-treeBNT and RegeneRx to hold *** and ***, respectively, of the total interests in the Company (the “ Final Milestone Event ”).

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(e) After the Final Milestone Event, and subject to Section 5.3 above, the percentage ownership of the Company shall continue to be maintained such that *** of the interests shall be held by G-treeBNT and *** by RegeneRx. Notwithstanding anything to the contrary contained in this Agreement, from and after the Final Milestone Event, under no circumstances shall RegeneRx’s ownership interest in the Company be less than ***.

(f) If, before the occurrence of the Final Milestone Event, the Company enters into an agreement for a transaction with a Third Party that provides for the exclusive licensing or sublicensing of the Company’s rights to the Product or Intellectual Property relating to the Product (such agreement the “ Third Party License Agreement ”), the Parties will engage in good faith discussions to determine the extent to which the Company will issue additional ownership interests to G-treeBNT, which determination shall take into account such relevant factors as the amount of funding and the extent of development efforts made by G-treeBNT since the previous Milestone Event, but which shall not result in G-treeBNT having a percentage ownership interest in excess of the following:

(i) If the Third Party Transaction Agreement is entered into after completion of administration of the Product to subjects in the pivotal Phase 3 study described in Section 9.1(c), but prior to the completion of such study, the percentage ownership of G-treeBNT may be adjusted to a percentage not greater than ***; and

(ii) If the Third Party Transaction Agreement is entered into after the NDA described in Section 9.1(d) has been accepted for filing by the FDA but prior to the final approval of the NDA by the FDA, the percentage ownership of G-treeBNT may be adjusted to a percentage not greater than ***.

(g) Unless the Members otherwise expressly agree, the Company shall not be funded with debt securities and shall not incur any debt obligations other than reasonable trade payables. Notwithstanding the above, funding by G-treeBNT may be freely provided to the Company in the form of an interest free Member’s loan, which shall automatically be converted into the applicable G-treeBNT percentage ownership in the Company (without any increase in percentage ownership as a result of the conversion of such Member loan) upon the subsequent occurrence of a Milestone Event as provided in this Section 9.1, as the Members acknowledge that there may be a time lag between provision of funding by G-treeBNT and a Milestone Event that triggers an increase in G-treeBNT’s percentage ownership as provided herein, for accounting and other purposes. Any Member loan shall be deemed to automatically be converted to capital but without the issuance of any additional ownership interest, and the Company shall have no further obligations with regard to such Member loan, upon (i) the Company’s entrance into a merger or reorganization with another Person, (ii) a sale of ownership interests, or securities convertible into ownership interests, in the Company to a Person other than RegeneRx or G-treeBNT, (iii) a sale or license of material assets or Intellectual Property of the Company, or (iv) a liquidation, dissolution, or winding-up of the Company. For avoidance of doubt, G-treeBNT shall not be granted any membership interest in excess of what is provided in Subsections 9.1(a)-(e).

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Section 10. Confidential Information

10.1 Confidential Information . Except to the extent expressly authorized by this Agreement, or otherwise agreed in writing by the Parties, the Parties agree that the receiving Party (the “ Receiving Party ”) shall keep confidential and shall not publish or otherwise disclose or use for any purpose other than as provided for in this Agreement any Confidential Information which is disclosed to it by any other Party (or an Affiliate thereof) (each, a “ Disclosing Party ”), except to the extent that the Receiving Party can demonstrate by competent written evidence that such Confidential Information:

(a) was already legally in the possession of the Receiving Party, other than under an obligation of confidentiality, at the time of disclosure by the Disclosing Party;

(b) was generally available to the public or otherwise part of the public domain at the time of its disclosure to the Receiving Party;

(c) became generally available to the public or was otherwise part of the public domain after its disclosure and other than through any act or omission of the Receiving Party in breach of this Agreement;

(d) was disclosed to the Receiving Party, other than under an obligation of confidentiality, by a Third Party who had no obligation to the Disclosing Party not to disclose such information to others; or

(e) is independently discovered or developed by the Receiving Party without the use of Confidential Information provided by the Disclosing Party.

10.2 Exceptions . The obligations of this Section 10 shall not apply to Confidential Information that:

(a) is submitted to Governmental Authorities by the Receiving Party to facilitate the issuance of any Regulatory Approval for the Product, or to obtain, maintain, enforce or defend Patents (in each case only to the extent permitted by this Agreement or the License Agreement; provided that (A) such disclosure may be only to the extent reasonably necessary to obtain Regulatory Approvals or Patents, as applicable, and (B) the Receiving Party shall take reasonable measures to assure confidential treatment of such information to the extent applicable;

(b) is provided by the Receiving Party to Third Parties (including, in the case of Licensee, to its Affiliates, Sublicensees or Distributors) under written confidentiality agreements having provisions at least as stringent as those in this Agreement, for consulting, development, external testing, marketing trials and other similar activities to the extent that such Receiving Party is permitted to conduct such activities pursuant to this Agreement; or

(c) is otherwise required to be disclosed by the Receiving Party in compliance with Laws (including, without limitation and for the avoidance of doubt, the requirements of the U.S. Securities and Exchange Commission and any other stock exchange or market on which securities issued by a Party are traded) or order by a court or other Governmental Authority having competent jurisdiction; provided , however , that the Receiving Party shall first give written notice to the Disclosing Party in order to allow the Disclosing Party the opportunity to seek confidential treatment of the Confidential Information. Confidential Information that is disclosed pursuant to Law or an order by a court or other Governmental Authority shall remain otherwise subject to the confidentiality and non-use provisions of this Section 10, and the Party disclosing Confidential Information pursuant to a Law or order by a court or other Governmental Authority shall take all reasonable steps necessary, including without limitation obtaining an order of confidentiality, to ensure the continued confidential treatment of such Confidential Information.

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10.3 Return of Confidential Information Upon Expiration or Termination of Agreement . Within thirty (30) days after any expiration or termination of this Agreement, each Party shall destroy (and certify to the other Party such destruction) or return (as requested by the other Party) all Confidential Information provided by the other Party except as otherwise set forth in this Agreement, and except that each Party may retain a single copy of the Confidential Information in its confidential legal files for the sole purpose of ascertaining its ongoing rights and responsibilities regarding the Confidential Information and for defending or enforcing its legal rights.

10.4 Written Agreements . The Receiving Party shall have in effect or obtain written agreements from each of its employees, consultants and contractors who have access to Confidential Information of the Disclosing Party, which agreements shall obligate such persons to similar obligations of confidentiality, and to assign to the Receiving Party all Know-How, information and Inventions conceived, made or reduced to practice by such persons during the course of performing the Receiving Party’s obligations under this Agreement. Each Party will notify the other Party promptly upon discovery of any unauthorized use or disclosure of the Confidential Information of the other Party.

10.5 Remedies . Each Party shall be entitled, in addition to any other right or remedy it may have, at law or in equity, to seek an injunction, without the posting of any bond or other security, enjoining or restraining the other Party from any violation or threatened violation of this Section 10.

Section 11. Representations and Warranties

11.1 Authorization . Each Party hereby represents, warrants and covenants to the other Parties as follows:

(a) the execution, delivery and performance by such Party of this Agreement and the consummation of the transactions contemplated hereby are within such Party’s corporate powers and have been duly authorized by all necessary corporate action on the part of such Party. This Agreement constitutes the legal, valid and binding obligation of such Party, enforceable against such Party in accordance with its terms;

(b) the execution, delivery and performance of this Agreement by such Party shall not violate any Law or any order of any Governmental Authority; and

(c) the execution, delivery or performance of this Agreement by such Party shall not require such Party to obtain any permits, authorizations or consents from any Governmental Authority, and such execution, delivery and performance shall not result in a material breach of or give rise to any termination of any agreement or contract to which such Party is a Party.

11.2 Disclaimer of Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NO PARTY MAKES ANY REPRESENTATION AND EXTENDS NO WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING WARRANTIES AS TO MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT.

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Section 12. Indemnification

12.1 Obligation to Indemnify . Each Member shall defend, indemnify and hold harmless the other Member and its Affiliates and its and their respective officers, directors, employees and agents (it being understood for purposes of this Section 12 the Company is an Affiliate of G-treeBNT) from and against any and all losses, liabilities, claims, damages, penalties, fines, costs and expenses (including reasonable legal fees and other litigation costs, regardless of outcome) (collectively “ Losses ”) arising as a result of any breach of covenants or representations or warranties of such Member or its Affiliates provided herein (it being understood that the Company shall be an Affiliate of G-treeBNT for purposes of this Section 12.1); provided, however, that neither Member shall have any obligation under this Section 12.1 to the extent that the other Member or any of its Affiliates or its and their respective officers, directors, employees and agents has been negligent, or in case such Losses arise out of or are attributable to any breach of this Agreement by the other Member.

12.2 Consequential Damages . NEITHER MEMBER SHALL BE LIABLE TO OR OTHERWISE RESPONSIBLE TO THE OTHER MEMBER HERETO FOR ANY LOSS OF PROFITS, DIMINUTION IN VALUE, OR INCIDENTAL, INDIRECT, CONSEQUENTIAL, SPECIAL, EXEMPLARY OR PUNITIVE DAMAGES THAT ARISE OUT OF OR RELATE TO THIS AGREEMENT OR THE PERFORMANCE OR BREACH HEREOF OR OTHERWISE AND WHETHER IN CONTRACT, TORT, STRICT LIABILITY OR OTHERWISE; PROVIDED, THAT, THE FOREGOING LIMITATION SHALL NOT APPLY: (I) TO A MEMBER’S INDEMNIFICATION OBLIGATIONS PURSUANT TO SECTION 12.1 ABOVE; (II) TO ANY GROSSLY NEGLIGENT ACT OR WILLFUL MISCONDUCT OF A MEMBER; OR (III) TO A MEMBER’S BREACH OF ITS CONFIDENTIALITY OBLIGATIONS PURSUANT TO SECTION 10 HEREOF.

Section 13. Term; Termination

13.1 Term . The term of this Agreement shall commence as of the Effective Date and shall continue until the termination or expiration of the License Agreement, unless sooner terminated in accordance with Section 13.2.

13.2 Termination .

(a) Termination of License Agreement . This Agreement shall terminate upon the termination of the License Agreement for any reason.

(b) Mutual Consent . This Agreement may be terminated at any time by mutual written agreement of the Parties.

(c) Material Breach . In the event any Party (or an Affiliate of a Party, as applicable) is in breach of any material obligation under this Agreement or the License Agreement (the “ Breaching Party ”), the non-breaching Party may give written notice to the Breaching Party specifying the claimed particulars of such breach, and in the event such material breach is not cured, within sixty (60) days following the date of such written notification, without prejudice to any other rights and remedies available at any time to the non-breaching Party, the non-breaching Party shall have the right thereafter to terminate this Agreement; provided, however, that if such breach is incapable of being cured, then such termination may be effective immediately upon such written notice to the Breaching Party.

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13.3 Termination for Bankruptcy . To the extent permitted under applicable Law, if at any time while this Agreement is in effect, an Event of Bankruptcy (as defined below) relating to any Party (the “ Bankrupt Party ”) occurs, the other Parties (the “ Other Parties ”) shall have, in addition to all other legal and equitable rights and remedies available hereunder, the option to terminate this Agreement upon sixty (60) days written notice to the Bankrupt Party from any Other Party. It is agreed and understood that if the Other Parties do not elect to terminate this Agreement upon the occurrence of an Event of Bankruptcy, except as may otherwise be agreed with the trustee or receiver appointed to manage the affairs of the Bankrupt Party, the Other Parties shall continue to take all action required of them under this Agreement as if the Event of Bankruptcy had not occurred. The term “ Event of Bankruptcy ” means: (i) filing in any court or agency pursuant to any statute or regulation of any state or country, a petition in bankruptcy or insolvency or for reorganization or for an arrangement or for the appointment of a receiver or trustee of the Bankrupt Party or of its assets; (ii) proposing a written agreement of composition or extension of a Bankrupt Party’s debts; (iii) being served with an involuntary petition against the Bankrupt Party, filed in any insolvency proceeding, and such petition shall not be dismissed within sixty (60) days after the filing thereof; (iv) proposing or being a party to any dissolution or liquidation when insolvent; or (v) making an assignment for the benefit of creditors. Without limitation, the Bankrupt Party’s rights under this Agreement shall include those rights afforded by 11 U.S.C. § 365(n) of the United States Bankruptcy Code (the “ Bankruptcy Code ”) and any successor thereto. If the bankruptcy trustee of a Bankrupt Party as a debtor or debtor-in-possession rejects this Agreement under 11 U.S.C. § 365(o) of the Bankruptcy Code, the Other Party may elect to retain its rights licensed from the Bankrupt Party hereunder (and any other supplementary agreements hereto) for the duration of this Agreement and avail itself of all rights and remedies to the full extent contemplated by this Agreement and 11 U.S.C. § 365(n) of the Bankruptcy Code, and any other relevant laws.

13.4 Liquidation Upon Termination . Upon a termination of this Agreement, the Board of Directors will wind up the affairs of the Company as follows:

(a) To the extent the License Agreement provides for distribution of any asset of the Company, including without limitation the intellectual property and related data, files, and records of the Company, such assets will be distributed as required by the License Agreement.

(b) Following the payment of all liabilities and obligations of the Company, all remaining assets of the Company will be distributed pro rata based on each Member’s interest in the Company, provided that non-cash assets of the Company shall be distributed pro rata to the extent possible and otherwise distributed as agreed by the Members.

13.5 Effect of Termination or Expiration . Expiration or termination of this Agreement by any Party shall not affect any claim, demand, liability or right of any Party arising pursuant to this Agreement prior to such termination or expiration hereof. Further, the provisions of Sections 10, 12, 13, 14 and 16 shall survive the expiration or termination of this Agreement. Termination of this Agreement pursuant to Section 13.2 shall not limit any other rights and remedies of the terminating Party.

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

Section 14. Non-Competition; Non-Solicitation

14.1 Non-Competition . Each Member agrees that, during the Joint Venture Period it shall not, and it shall cause its Affiliates not to, separately from the Company, directly or indirectly, either for itself or for any other Person, enter into, engage in, or represent or own in excess of 5% beneficial ownership interest in, any business with operations engaged directly or indirectly in the development, commercialization, production or distribution of the Product or any product that may be reasonably considered a competing product for the Product as determined by its use of Tβ4, its formulation and its use to treat an indication in the Field and within the Territory, unless the other Member provides written consent thereto; provided, however, that nothing herein shall preclude RegeneRx from providing any services to an entity that may have a business that is deemed to compete with the Product if such services are provided to such entity in connection with a business not related to such competing business. Notwithstanding the foregoing, for the avoidance of doubt, nothing in this Agreement shall preclude (x) RegeneRx from engaging in any research, development, manufacturing, promotion or marketing activities relating to the Product within the Field and/or in the Territory as long as such activities are undertaken for the purposes of developing or commercializing the Product outside the Field or outside the Territory, and (y) G-treeBNT from exercising all of its rights granted to it with respect to the Product as contemplated by the Pan Asia License Agreement.

14.2 Non-Solicitation . During the Joint Venture Period and for a period of 24 months thereafter, no Party nor its Affiliates may, either on its own account or in conjunction with or on behalf of any other Person, employ, solicit, entice away from, or induce the termination of employment or attempt to employ, solicit, entice away from, or induce the termination of employment, any Person who is or will have been at the date of or within 24 months before any solicitation, enticement or attempt, an officer, director, consultant or employee of any other Party, whether or not that Person would commit a breach of contract by reason of leaving employment or service relationship with the Company or such other Party; provided, however, that the foregoing does not restrict a Party from employing a director or officer who was an employee of that Party while serving as a director or as an officer of the Company nor does it restrict a Party’s general advertisements with respect to a position that are not directed to officers, managers, consultants or employees of the Company or another Party.

Section 15. Reporting and Accounting Provisions

15.1 Books and Records . The Company will make and keep books, records and accounts that, in reasonable detail, accurately and fairly reflect in all material respects the assets, liabilities and operations of the Company. The Company will also maintain a system of internal accounting controls that complies with applicable law and that will provide reasonable assurance that:

(a) transactions are executed in accordance with the Board of Director’s general or specific authorization;

(b) transactions are recorded as necessary (i) to permit preparation of financial statements in conformity with GAAP or any other criteria applicable to the statements and (ii) to maintain accountability for assets;

(d) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

15.2 Other Accounting and Tax Provisions . Appendix C contains additional accounting and tax provisions applicable to the Company.

15.3 Distribution of Financial Statements and Other Reports . The Company will distribute to each Member:

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(a) Monthly Information . As soon as practical and in any event within 10 Business Days following the last day of each month,

(i) a statement of the Company’s: (A) cash; (B) working capital; (C) obligations for borrowed money; (D) revenue; and (E) backlog; and

(ii) a summary of any transaction or contract involving an obligation in excess of US$25,000.

(b) Quarterly Information . As soon as practical after the end of each of the first three quarters and in any event within 30 days after the end of each such period, a balance sheet as of the end of the period and statements of income and cash flow, both for the period and for the year to date, that will be certified by the CFO as fairly presenting in all material respects the Company’s financial position as of that date and the results of its operations for those periods in accordance with GAAP (subject to normal year-end adjustments and the furnishing of notes; provided, however, that notes will be furnished to the extent necessary to make the statements not misleading);

(c) Annual Information . As soon as practical after the end of the Fiscal Year and in any event within 60 days thereafter:

(i) a balance sheet as of the year-end and statements of income and cash flow, both for the fourth quarter and for the year; and

(ii) the Company’s tax return, which will be reviewed by its independent certified public accountants, and information that will be required to permit the Member to prepare its tax return. The year-end balance sheet and the statements for the year will be examined in accordance with generally accepted auditing standards by the Company’s independent certified public accountants, who will render their opinion on whether those statements fairly present in all material respects the Company’s financial position as of that date and the results of its operations for those periods in accordance with GAAP.

15.4 Right of Inspection and Examination . At all reasonable times, each Member, through its representatives, has the right to inspect and copy the records of the Company and to examine the employees of the Company with regard to its activities. These rights may be exercised through any agent or employee of the Member designated by notice to the CEO. The inspecting Member will bear all expenses incurred in the inspection or examination.

15.5 Auditors . The initial auditors of the Company shall be determined upon mutual consultation between the Parties after the Effective Date.

Section 16. Miscellaneous

16.1 Waiver . The waiver by any Party of a breach of any provision of this Agreement by another Party shall not operate, or be construed, as a waiver of any subsequent breach.

16.2 Modification . No change, modification, or waiver of any term of this Agreement shall be valid unless it is in writing and signed by each Party.

16.3 Entire Agreement . This Agreement, together with the License Agreement (including all exhibits and attachments hereto and thereto, all of which are incorporated herein by reference) constitutes the entire agreement among the Parties (and their Affiliates) with respect to the subject matter hereof and thereof, and supersedes all prior agreements and understandings, whether oral or written, among the Parties.

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

16.4 English Language . This Agreement is written and executed in the English language. Any translation into any other language shall not be an official version of this Agreement and in the event of any conflict in interpretation between the English version and such translation, the English version shall prevail.

16.5 Assignment . Except as expressly permitted otherwise in this Agreement, neither Party may assign its rights or delegate its obligations hereunder to any Person without the written consent of the other Party, which consent shall not be unreasonably withheld. No such assignment shall remove or mitigate the obligations or liability of the assigning Party unless otherwise agreed in writing by the non-assigning Party.

16.6 Third Party Beneficiaries . The Parties do not intend, nor shall any provision of this Agreement be interpreted, to create for any person any third party beneficiary rights.

16.7 Dispute Resolution . All disputes among the Parties concerning this Agreement shall be resolved in the following manner:

(a) Good Faith Negotiations by Officers . In the event of disputes among the Parties arising out of or relating to this Agreement, or the breach, termination or invalidity thereof, a Party seeking to resolve such dispute will, by written notice to the other, have such dispute referred to their respective chief executive officers, for attempted resolution by good faith negotiations within fourteen (14) days after such notice is received.

(b) Mediation . In the event that the Parties are unable to resolve a dispute through good faith negotiations pursuant to Section 16.7(a), the Parties agree to submit such dispute to non-binding mediation using an industry expert mutually acceptable to the Parties. The costs of any such mediation shall be shared by the Parties equally.

(c) Arbitration . If all good faith attempts to resolve a dispute through negotiations and mediation pursuant to Sections 16.7(a) and (b) have failed after sixty (60) days from notice provided pursuant to Section 16.7(a), then upon the request of any Party, the dispute shall be finally resolved by binding arbitration administered by I.C.C. Arbitration (the “ ICC Rules ”).

(i) The arbitration shall be conducted by a panel of three neutral arbitrators (the “ Panel ”) appointed in accordance with the ICC Rules.

(ii) The arbitration proceedings shall take place in New York NY, USA. The arbitral proceedings and all pleadings shall be in the English language.

(iii) The Panel shall have the power to decide all questions of arbitrability.

(iv) At the request of any Party, the Panel will enter an appropriate protective order to maintain the confidentiality of information produced or exchanged in the course of the arbitration proceedings.

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(v) The Panel is empowered to award any remedy allowed by law, including monetary damages, prejudgment interest and punitive damages, and to grant final, complete, interim or interlocutory relief, including injunctive relief

(vi) The Parties may apply to a court of competent jurisdiction within the United States for a temporary restraining order, preliminary injunction, or other interim or conservatory relief, as necessary, without breach of this arbitration agreement and without any abridgment of the powers of the arbitrators. Judgment on the award rendered by the Panel may be entered in any court having jurisdiction thereof. Each Party hereby waives any defenses it may have to the personal jurisdiction and venue of such courts to resolve such disputes, including without limitation the defense of forum non conveniens , and each Party agrees not to file any motion to seek any relief under any forum non conveniens defense.

(vii) Each Party shall bear its own legal fees arising in connection with the dispute. The Panel may assess costs, fees and expenses of the ICC and the Panel to the Parties in the manner the Panel deems appropriate under the circumstances.

16.8 Notices . Except as otherwise provided herein, all notices or other communications hereunder shall be deemed sufficient if given in writing, via registered mail (return receipt requested), postage paid, or by reputable high speed delivery service ( e.g. , FedEx) or by courier addressed to the appropriate Party at the address set forth below, or at such other place as such Party may designate in writing to the other Party.

If to the Company:

ReGenTree, LLC

22 ^nd FL, Parkview Tower

248 Jungjail-ro, Bundang-gu

Seongnam-si, Gyeonggi-do 463-863

Republic of Korea

Attn: President & CEO

Phone: +82 31 786 7700

Fax.: +82 31 786 7801

If to G-treeBNT:

G-treeBNT Co., Ltd.

22 ^nd FL, Parkview Tower

248 Jungjail-ro, Bundang-gu

Seongnam-si, Gyeonggi-do 463-863

Republic of Korea

Attn: President & CEO

Phone: +82 31 786 7700

Fax.: +82 31 786 7801

With a copy to:

Yoon & Yang LLC

Asem Tower 19F,

517 Yeongdongdaero, Gangnam-gu

Seoul 135-798, Korea
Attn: Sung-Jin Kim Esq.
Direct: +82 2 6003 8335

Fax: +82 2 6003 7835

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

If to RegeneRx:

RegeneRx Biopharmaceuticals, Inc.

15245 Shady Grove Road

Suite 470

Rockville, Maryland 20850

U.S.A.

Attn: President and CEO

Phone: 301.208.9191

Fax: 301.208.9194

With a copy to:

Todd A. Taylor, Esq.

Fredrikson & Byron, P.A.

200 South 6th Street, Suite 4000

Minneapolis, Minnesota 55402

U.S.A.

Direct: (612) 492-7355

Fax: (612) 492-7077

All such notices shall be effective upon receipt.

16.9 Governing Law . This Agreement shall be governed and construed in accordance with the laws of the New York without regard to its principles of conflict of laws.

16.10 Severability . The provisions of this Agreement are severable. If any item or provision of this Agreement shall to any extent be invalid or unenforceable, the remainder of this Agreement shall not be affected thereby, and each term and provision of this Agreement shall be valid and shall be enforced to the fullest extent permitted by law. The Parties shall use diligent good faith efforts to revise this Agreement as and to the extent reasonably necessary to effectuate their original intent and purpose under this Agreement.

[ signature page follows ]

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IN WITNESS WHEREOF, this Agreement has been executed by a duly authorized officer of each Party as of the Effective Date.

	ReGenTree, LLC

	By:	/s/ Won S. Yang
	Name: Won S. Yang
	Title: President & CEO

	G-treeBNT Co., Ltd.

	By:	/s/ Won S. Yang
	Name: Won S. Yang
	Title: President & CEO

RegeneRx Biopharmaceuticals, Inc.

	By:	/s/ J.J. Finkelstein
	Name: J.J. Finkelstein
	Title: President & CEO

[ Signature Page to G-treeBNT/RegeneRx Joint Venture Agreement ]

Appendix A

Form of

CERTIFICATE OF FORMATION

REGENTREE, LLC

The undersigned, an authorized natural person, for the purpose of forming a limited liability company, under the provisions and subject to the requirements of the State of Delaware (particularly Chapter 18, Title 6 of the Delaware Code and the acts amendatory thereof and supplemental thereto, and known, identified, and referred to as the "Delaware Limited Liability Company Act"), hereby certifies that:

ARTICLE 1.

The name of the limited liability company is ReGenTree, LLC.

ARTICLE 2.

The address of the registered office of the limited liability company in Delaware is located at 1209 Orange Street, Wilmington, DE 19801. The name of its registered agent at such address is The Corporation Trust Company.

IN WITNESS WHEREOF, I have executed this Certificate of Formation as of January 27, 2015.


	Jacqueline A. Bernu, Authorized Person

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Appendix B

[See Exhibit 10.2 to this Quarterly Report on Form 10-Q]

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Exhibit C

Tax Provisions

Subject to finalization by the parties.

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

Exhibit 10.2

RGN-259 U.S. LICENSE Agreement

This License Agreement (this “ Agreement ” or this “ License Agreement ”) is effective as of January 28, 2015 (the “ Effective Date ”), by and among RegeneRx Biopharmaceuticals, Inc., a company organized and existing under the laws of the state of Delaware, with offices at 15245 Shady Grove Road, Suite 470, Rockville, Maryland, U.S.A. (hereinafter “ Licensor ”), and ReGenTree, LLC, with offices at 15245 Shady Grove Road, Suite 470, Rockville, Maryland, U.S.A. (hereinafter “ Licensee ”), each a “ Party ” and, collectively, the “ Parties .”

Recitals

WHEREAS, Licensor is engaged in the business of developing biopharmaceutical products, including the pre-clinical, the clinical development and future commercialization of the Product (as defined herein);

WHEREAS, Licensee is engaged in, or has been organized to be engaged in, the business of developing, marketing, manufacturing, and distributing biopharmaceutical products pursuant to a joint venture between Licensor and Parent (as defined herein) for the purposes of developing and commercializing the Product in the Field in the Territory, which joint venture is governed by the terms and conditions of the JV Agreement (as defined herein); and

WHEREAS, pursuant to the terms of the JV Agreement, Licensor has agreed to grant, and Licensee wishes to obtain, on the terms and conditions set forth herein, the rights to develop, manufacture and commercialize the Product in the Field, in the Territory (as each such term is defined herein).

NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

Section 1. Definitions

As used in this Agreement, the following capitalized terms shall have the following meanings:

“ Affiliate ” shall mean, with respect to a Person, any Person that controls, is controlled by or is under common control with such first Person. For purposes of this definition only, “control” means (a) to possess, directly or indirectly, the power to direct the management or policies of a Person, whether through ownership of voting securities, or by contract relating to voting rights or corporate governance, or (b) to own, directly or indirectly, at least fifty percent (50%) of the outstanding voting securities or other ownership interest of such Person. For the avoidance of doubt, Licensee and Parent are Affiliates of each other, but Licensor is not an Affiliate of Licensee.

“ Agreement ” shall have the meaning given such term in the preamble.

“ API ” shall mean Tβ4 in the form of an active ingredient to be utilized as a component in the Product.

“ Business Day ” shall mean any day of the year other than Saturday, Sunday and any day on which national banking institutions in New York and Maryland are open to the public for conducting business and are not required or authorized to be closed.

“ Challenge ” shall have the meaning given such term in Section 7.8(b) .

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

“ Change of Control ” shall mean, with respect to a Party, the occurrence of any of the following:

(a) any consolidation, merger, recapitalization or reorganization of a Party with or into any Third Party, or any other corporate reorganization involving a Third Party (“ Merger ”), as long as the stockholders of such Party immediately prior to the Merger own less than fifty percent (50%) of the surviving entity’s voting power immediately after the Merger;

(b) a change in the beneficial ownership of more than fifty percent (50%) of the voting securities of any Party (whether in a single transaction or series of related transactions) where, immediately after giving effect to such change, the legal or beneficial owner of more than fifty percent (50%) of the voting securities of such Party is a Third Party; or

(c) the sale, transfer, assignment or other similar disposition to a Third Party of all or substantially all of a Party’s assets, to which this Agreement relates, in one or a series of related transactions.

“ CMC ” shall mean chemistry, manufacturing and controls that are a critical element of the drug development process and increase in complexity as the development process matures. CMC includes manufacturing of bulk drug substance and final drug product, establishing specifications, release criteria, stability programs, and analytical methods.

“ Commercialization Plan ” shall have the meaning given such term in Section 4.1 .

“ Commercially Diligent Efforts ” shall mean, with respect to the development and commercialization by Licensee of at least one Product, the level of efforts and resources generally used by similarly situated pharmaceutical companies developing and/or marketing compounds or products throughout the Territory (including internally developed, acquired and in-licensed compounds or products) with similar commercial potential at a similar stage in their lifecycle (assuming continuing development of such product).

“ Confidential Information ” shall mean any and all information, data, results, Inventions, trade secrets, techniques, material, or compositions of matter of any type or kind, including without limitation all Know-How and all other scientific, pre-clinical, clinical, regulatory, manufacturing, marketing, personnel, financial, legal and commercial information or data, whether communicated in writing, orally or by any other method, that a Party treats or identifies as confidential and, in each case, is disclosed by one Party to the other Party under this Agreement.

“ Control ”, “ Controls ” and “ Controlled ” shall mean, with respect to a particular item of information or intellectual property right, that the applicable Party or any Affiliate of such Party owns or has a license to such item or right and has the ability to grant to the other Party access to and a license or sublicense (as applicable) under such item or rights as provided for herein without violating the terms of any agreement or other arrangement with any Third Party existing as of the Effective Date or thereafter.

“ Development Plan ” shall have the meaning given such term in Section 3.1 .

“ Disclosing Party ” shall have the meaning given such term in Section 8.1 .

“ Distributor ” shall mean any Third Party appointed by Licensee to distribute, market and sell Product purchased from Licensee or any of its Affiliates (regardless of whether such Third Party has the right or obligation to provide packaging or labeling services with respect to such Product).

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

“ Dry Eye Syndrome ” means a multifactorial disease of the tears and ocular surface that results in symptoms of discomfort, visual disturbance, and tear film instability with potential damage to the ocular surface. It is commonly accompanied by increased osmolarity of the tear film and inflammation of the ocular surface.

“ Effective Date ” shall have the meaning given such term in the preamble.

“ FDA ” shall mean the United States Food and Drug Administration or any successor U.S. governmental agency performing similar functions.

“ Field ” shall mean the treatment of all human ophthalmic diseases and conditions in the Territory using Tβ4 in any formulation delivered topically to the eye, whether in the form of prescription drugs, over-the-counter drugs, a medical device or otherwise; provided , however , that “Field” shall not include any use of the Product incorporated into the form of any type of cosmetic or food product.

“ First Commercial Sale ” shall mean the initial sale of Product by or on behalf of Licensee, its Affiliates, Sublicensees or Distributors in exchange for cash or some equivalent to which value can be assigned for the purpose of determining Net Sales in the Territory following Regulatory Approval of the Product in the Territory. For clarity, First Commercial Sale shall not include transfers of Product at or below cost by or on behalf of Licensee, its Affiliates, Sublicensees or Distributors in connection with compassionate use, emergency use, treatment INDs, or the like authorized by the FDA or any corresponding Governmental Authorities in the Territory.

“ GAAP ” shall mean, in the case of the Licensor, Generally Accepted Accounting Principles recognized in the United States, and in the case of the Licensee, Generally Accepted Accounting Principles recognized in the United States.

“ Generic or Branded Generic ” shall mean a drug product containing the same active ingredients as Products and is subject to the regulations of the governments of countries where they are dispensed and is comparable to brand/reference listed drug product in dosage form, strength, route of administration, quality and performance characteristics, and intended use.

“ GCP ” shall mean the then current good clinical practices as defined in U.S. Regulations 21 C.F.R. §§ 11, 50, 54, 56, 312 and 314, the International Conference of Harmonization (ICH) E6 “Good Clinical Practice: Consolidated Guidance,” and in any successor regulation or any official guidance documents issued by a Governmental Authority.

“ GLP ” shall mean the then current good laboratory practice standards as defined by the FDA pursuant to 21 C.F.R. Part 58, and in any successor regulation or any official guidance documents issued by a Governmental Authority.

“ GMP ” shall mean the then current good manufacturing practices as defined by the FDA pursuant to 21 C.F.R. §§ 210 and 211 and in any successor regulation or any official guidance documents issued by a Governmental Authority.

“ Governmental Action ” shall have the meaning given such term in Section 12.2(b) .

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

“ ICC Rules ” shall have the meaning given such term in Section 14.8(c) .

“ ICH ” shall mean the International Conference of Harmonization.

“ IND ” shall mean an investigational new drug application filed with the FDA, or the equivalent in any jurisdiction in the Territory.

“ Indemnified Party ” shall have the meaning given such term in Section 10.3 .

“ Indemnifying Party ” shall have the meaning given such term in Section 10.3 .

“ Intellectual Property ” shall mean any Inventions, Patents, patent rights, utility models, copyrights, trade secrets, Trademarks, service marks, Know-How, technical information and all other intellectual property rights.

“ Invention ” shall mean any process, method, use, composition of matter, article of manufacture, discovery, finding or invention, whether or not patentable.

“ Joint Development Committee ” shall have the meaning given such term in Section 3.4 .

“ Joint Inventions ” shall have the meaning given such term in Section 7.2(c) .

“ JV Agreement ” shall mean that certain Joint Venture Agreement entered into on the date hereof between Licensor and Parent.

“ Know-How ” shall mean all tangible and intangible (i) techniques, technology, practices, trade secrets, methods, knowledge, know-how, skill, experience, test data and results (including pharmacological, toxicological and clinical test data and results), analytical and quality control data, results or descriptions, software and algorithms, and (ii) compounds, compositions of matter, and physical, biological or chemical material.

“ Laws ” shall mean (i) all constitutions, treaties, laws, statutes, codes, ordinances, guidance, orders, decrees, rules, regulations, and municipal by-laws of any Governmental Authority, whether domestic, foreign or international, or as may otherwise be agreed in writing between the Parties, (ii) all judgments, orders, writs, injunctions, decisions, rulings, decrees and awards of any Governmental Authority, and (iii) all policies, practices and guidelines of any Governmental Authority.

“ Licensed Know-How ” shall mean Know-How owned or Controlled by Licensor that exists as of the Effective Date or at any time thereafter during the Term, in each case that is necessary or useful for the development, registration, manufacture, promotion, marketing, distribution, or sale of the Product in the Field in the Territory.

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“ Licensed Patents ” shall mean the Patents owned or Controlled by Licensor as of the Effective Date (as listed in Exhibit A hereto), to the extent that such Patents disclose or claim a Product as well as any future Patents owned or Controlled by Licensor or its Affiliates during the Term, to the extent that such future Patents disclose or claim the Product.

“ Licensee ” shall have the meaning given such term in the preamble.

“ Licensee Inventions ” shall have the meaning given such term in Section 7.2(a) .

“ Licensee Product Data ” shall have the meaning given such term in Section 12.3(b)(i) .

“ Licensor ” shall have the meaning given such term in the preamble.

“ Licensor Inventions ” shall have the meaning given such term in Section 7.2(b) .

“ Losses ” shall have the meaning given such term in Section 10.1 .

“ Marketing Approval ” shall mean all approvals, licenses, registrations, or authorizations of a Regulatory Authority in any jurisdiction of the Territory necessary for the manufacture, use, storage, marketing, importation or sale of the Product in such jurisdiction.

“ Marketing Year ” shall mean the period commencing on the date of the first Marketing Approval in the Territory and ending on December 31 of the same year. Thereafter, and for the duration of this Agreement, each subsequent Marketing Year will correspond to a calendar year period (i.e., from January 1 to December 31).

“ NDA ” shall mean a new drug application submitted by a drug sponsor pursuant to Section 505(b) of the U.S. Food, Drug and Cosmetic Act (and related regulations promulgated by the FDA thereunder) as the vehicle through which the drug sponsor formally proposes that the FDA approve a new pharmaceutical product for sale and marketing in the U.S.

“ Net Sales ” shall mean the gross receipts for sales made by Licensee, its Affiliates, Sublicensees and Distributors of any article or substance containing a Product to other independent buyer(s) in bona fide arm’s length transactions, less the following deductions with respect to such sale, to the extent applicable to the Product and to the extent actually allowed and taken: (i) quantity and/or cash discounts actually allowed or taken to the extent customary; (ii) customs, duties, excise taxes, if any, directly related to the sale of the Product and actually paid; (iii) amounts allowed by reason of rejections and return of goods; (iv) Third-Party rebates related to the sale of the Product; and (v) import tax, value-added tax and other similar sales taxes related to the sale of the Product, all to the extent in accordance with GAAP as consistently applied across all products of Licensee. Notwithstanding the foregoing, Net Sales shall not include, and shall be deemed zero with respect to (x) Products used by Licensee, its Affiliates or Sublicensees for their internal use, and (y) Product provided by or on behalf of Licensee, its Affiliates or its Sublicensees for purposes of resale within the Territory, provided such final resale is included in Net Sales. No deductions shall be made for commissions paid to individuals, whether with independent sales agencies or regularly employed by Licensee, its Affiliates, Sublicensees or Distributors, and on its payroll, or for the cost of collections. On sales made in other than in arm’s length transaction, the value of Net Sales attributed to such a transaction shall be that which would have been received in an arm’s length transaction, based on sales of like quantity and quality products on or about the time of such transaction.

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

“ Neurotrophic Keratopathy ” or “ NK ” shall mean a rare degenerative corneal disease caused by an impairment of trigeminal corneal innervation, leading to a decrease or absence of corneal sensation.

“ Pan-Asia License Agreement ” shall mean that certain RGN-259 License Agreement dated March 7, 2014, by and between Licensor and Parent.

“ Panel ” shall have the meaning given such term in Section 14.8(c)(i) .

“ Parent ” means G-treeBNT Co., Ltd. , with offices located at 22 ^nd Floor, Parkview Tower, 248 Jungjail-ro, Bundang-gu, Seongnam-si, Gyeonggi-do 463-863, Republic of Korea.

“ Parties ” and “ Party ” shall have the meanings given such terms in the preamble.

“ Patents ” shall mean any and all patents and/or patent applications, and any patents issuing on such patent applications, as well as any continuations, divisions, reissues and re-examinations of any of the foregoing.

“ PHS ” shall mean the National Institutes of Health, the Centers for Disease Control, and/or the FDA, agencies of the United States Public Health Service within the Department of Health and Human Services.

“ PHS License ” shall mean the Patent License Agreement, dated as of February 6, 2001, between PHS and Licensor, attached hereto as Exhibit B .

“ Product ” shall mean (i) the drug candidate that is commonly identified as RGN-259, (ii) a drug or drug candidate that uses, contains, or derives from Tβ4, a copy of the naturally-occurring 43-amino acid peptide, regardless of such Tβ4’s origin, chemical or biological synthesis, in any combination thereof, or (iii) any product or product part that is covered in whole or in part by a Valid Claim contained in the Licensed Patents. The term Product shall include both clinical and commercial applications of any such product.

“ Product Liability Claim ” shall mean any Third Party proceedings involving any actual or alleged death or bodily injury arising out of or resulting from the use of the Product sold by Licensee or its Sublicensees.

“ Prohibited List ” shall mean (a) the HHS/OIG List of Excluded Individuals/Entities (available through the Internet at http://www.oig.hhs.gov ); (b) the General Services Administration’s List of Parties Excluded from Federal Programs (available through the Internet at http://www.epls.gov ); and (c) the FDA Debarment List (available through the Internet at http://www.fda.gov/ora/compliance_ref/debar/ ).

“ Prosecute ” shall have the meaning given such term in Section 7.5(a) .

“ Receiving Party ” shall have the meaning given such term in Section 8.1 .

“ Regulatory Approval ” shall mean any and all approvals (including, to the extent necessary, pricing approvals), licenses, registrations or authorizations of any Governmental Authority, necessary for the promotion, development (including without limitation the conduct of clinical trials), marketing, distribution, manufacture, sale or importation of a Product.

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“ Regulatory Authority ” shall mean any applicable Governmental Authority in any jurisdiction in the Territory from which Regulatory Approval is required to be obtained.

“ Regulatory Laws ” shall mean all applicable Laws governing (i) marketing approval or clearance, import, export, testing, investigation, development, manufacture, packaging, labeling, handling, storage, distribution, installation, servicing, marketing, or sale, (ii) recordkeeping and reporting obligations, (iii) recalls, or (iv) similar regulatory matters, with respect to the Product.

“ Relevant Period ” shall mean, on a Product-by-Product basis and on a country-by-country basis, the period starting from the Effective Date and ending on (i) the expiration of the last-to-expire valid and applicable Licensed Patent within the given country of the Territory or (ii) the twenty fifth (25th) anniversary of the First Commercial Sale of each Product in such country, whichever is later.

“ Royalty Term ” shall mean the period commencing on the First Commercial Sale and ending at the expiration of or the effective date of termination of this Agreement.

“ Sublicensee ” shall mean any Affiliate or Third Party to whom Licensee sublicenses any rights as permitted by Section 2.1(c) .

“ Sublicense Fees ” shall mean all consideration, in whatever form, received from a Sublicensee in connection with a license or sublicense of any of the rights of Licensee (or any Affiliate) hereunder, including, but not limited to (1) upfront fees received by Licensee or its Affiliates for the granting of a license or a sublicense to a Sublicensee; (2) fees payable upon the occurrence of any milestone, condition, event or happening and which are paid or payable to Licensee or its Affiliates from a Sublicensee; and (3) periodic or maintenance fees. Sublicense Fees shall not include amounts paid for the purchase by a Sublicensee of debt or equity securities of Licensee (other than the extent to which the price paid for such securities exceeds their fair market value, in which case such excess shall be deemed Sublicense fees).

“ Tβ4 ” shall mean the 43 amino acid peptide commonly referred to as Thymosin Beta 4.

“ Territory ” shall mean the United States of America.

“ Third Party ” shall mean any Person other than Licensor, Licensee, and Affiliates of either Party.

“ Trademark ” shall mean any trademark, trade dress, brand mark, trade name, brand name, logo, business symbol or other similar indicia of origin.

“ Valid Claim ” shall mean a claim of an issued and unexpired Licensed Patent, that has not been revoked or held unenforceable or invalid by a decision of a court or other Governmental Authority of competent jurisdiction, and that is not appealable or has not been appealed within the time allowed for appeal, and that has not been abandoned, disclaimed, denied or admitted to be invalid or unenforceable through reissue, re-examination, disclaimer or otherwise.

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Section 2. License Grant and Other Rights

2.1 License Grants to Licensee

(a) Non- Exclusive License to Use to Develop and Use . Subject to the terms of this Agreement, Licensor hereby grants to Licensee a non-exclusive, irrevocable (except as otherwise provided for in this Agreement and in the PHS License), royalty-free license to use the Licensed Patents and the Licensed Know-How to develop and formulate the Product in the Field in the Territory.

(b) Exclusive License to Make and Sell . Subject to the terms of this Agreement, Licensor hereby grants to Licensee an exclusive, irrevocable (except as otherwise provided for in this Agreement and in the PHS License) royalty-bearing license to use the Licensed Patents and the Licensed Know-How to manufacture, distribute, promote, offer to sell, and sell the Product in the Field in the Territory.

(c) Early Termination of License . Subject to the terms of this Agreement, the licenses granted to Licensee under this Section 2.1 shall terminate if Licensee does not begin either randomization or dosing of patients in a Licensee-sponsored clinical trial of the Product in (i) Neurotrophic Keratopathy on or before the first anniversary of the Effective Date and (ii) Dry Eye Syndrome on or before the second anniversary of the Effective Date, unless such delay in commencement with regards to Neurotrophic Keratopathy and/or Dry Eye Syndrome arose or resulted from or was caused by a directive of the FDA with regard to requirements for regulatory or CMC matters for the Product or such clinical trial.

(d) Sublicensing .

(i) Licensee shall be entitled to sublicense any or all of the rights granted to Licensee pursuant to Sections 2.1(a) and 2.1(b) to any of its Affiliates or a Third Party upon thirty (30) days’ prior written notice to Licensor (and subject to Licensor’s written approval, which approval shall not be unreasonably withheld), which notice shall include the identity of such Affiliate or Third Party.

(ii) All sublicenses granted to Affiliates or Third Parties pursuant to Section 2.1(c)(i) above shall be subject to all terms, conditions, obligations and covenants of this Agreement and all applicable provisions of the PHS License. No sublicense shall relieve Licensee of any of its obligations hereunder.

(e) No Further Licenses . Except for the licenses expressly granted to Licensee pursuant to this Agreement, no other rights or licenses are granted to Licensee in or under this Agreement by implication.

(f) Licensor’s Retained Rights . Notwithstanding the rights granted to Licensee in Sections 2.1(a) and 2.1(b) and without limiting the generality of Section 2.1(g) , Licensor retains the rights to:

(i) conduct or have conducted clinical trials and other studies involving the Product in the Territory for the generation of data in support of regulatory submissions to any Regulatory Authority (A) outside the Territory or (B) within the Territory but outside the Field, in each case where the exclusive license is granted to Licensee as per Section 2.1(b) above; or

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(ii) conduct activities in the Territory with respect to the development, manufacture, formulation and processing of the Product for use and commercialization outside the countries of the Territory where the exclusive license is granted to the Licensee as per Section 2.1(b) above.

(g) Negative Covenant . Licensee covenants that it will not, and it will not permit any of its Affiliates to, use or practice any Licensed Patents and Licensed Know-How outside the scope of the licenses granted to it under this Section 2.1 .

(h) Transfer of Licensed Know-How . Upon the reasonable request of Licensee and at no cost to Licensee, Licensor shall promptly provide Licensee with such tangible embodiments of the Licensed Know-How as are in Licensor’s possession or control so as to permit Licensee to enjoy the licenses granted to it pursuant to Section 2.1(a) and 2.1(b) above.

2.2 Use of Affiliates . At each Party’s option, any of each Party’s rights under this Agreement may be exercised by an Affiliate of such Party. Further, at each Party’s option, any of each Party’s obligations under this Agreement may be performed by an Affiliate of such Party, and such obligations will be deemed satisfied upon performance by such Affiliate. For the avoidance of doubt, nothing contained in this Section 2.2 shall relieve each Party of any of its obligations hereunder unless fully performed by its Affiliate.

2.3 PHS Reserved Rights . Notwithstanding anything contained in Section 2.1 to the contrary, Licensee:

(a) acknowledges that PHS has retained certain rights and interests in the Licensed Patents pursuant to the PHS License;

(b) agrees that the provisions of the PHS License contained in Exhibit B shall be binding on Licensee and its successors as if Licensee or its successors were the licensee under the PHS License; and

Section 3. Development

3.1 Development Plan .

(a) Development Plan . Licensee will exercise Commercially Diligent Efforts in carrying out all development activities with respect to the Product in the Territory in accordance with a development plan as agreed upon from time to time in writing by the Parties (the “ Development Plan ”). The Development Plan is attached to this Agreement as Exhibit C and incorporated by reference herein.

(b) Development Activities . For purposes of this Agreement, development activities shall mean all activities that are reasonably required to obtain Regulatory Approval of the Product in the Territory as a treatment for Dry Eye Syndrome and NK, including without limitation toxicology, in vitro testing, in vivo testing, in silico testing, stability testing, statistical analysis and report writing, packaging and regulatory affairs, preclinical studies and clinical trials.

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3.2 Content of Development Plans . The Development Plan (as amended after the Effective Date) shall include, to the extent applicable, (i) the identity of the Product to be developed, (ii) a description of the program of development for such Product through Regulatory Approval in the Territory, (iii) a description of the development activities, which shall include, as appropriate, preclinical studies, pharmacology, toxicology, formulation, clinical pharmacology studies, clinical studies and regulatory plans and other key elements necessary to obtain Regulatory Approval for the Product, (iv) specific plans and protocols or its synopsis for clinical studies, (v) a schedule for all such activities, and (vi) tentative deadlines for meeting regulatory milestones.

3.3 Updates and Amendments to the Development Plan . The Parties shall amend the Development Plan at least once every twelve (12) months to expand and refine the description of the activities specified in the initial Development Plan or other then current Development Plan and to add other development activities, and the anticipated schedule and budgets for all such activities. Such amended Development Plan shall become effective only upon the approval of the Joint Development Committee. If the Parties fail to update the Development Plan as required by this Section 3.3 the most recently approved Development Plan shall continue in effect until such time as an amended Development Plan becomes effective.

3.4 Joint Development Committee . Within ninety (90) days following the Effective Date, Parent and Licensor shall establish a joint development committee (the “ Joint Development Committee ”) to coordinate and oversee the development of the Product in the Territory.

(a) Composition of the Joint Development Committee . The Joint Development Committee shall consist of three (3) persons (two (2) from Parent and one (1) from Licensor), each of whom shall have relevant experience and skill appropriate for service on the Joint Development Committee, such as having served as heads of clinical, manufacturing, and commercial development. Parent and Licensor may establish and later change the number of representatives that Parent and Licensor has on the Joint Development Committee. Parent and Licensor may change any of its representatives on the Joint Development Committee at any time upon notice to Parent, in the case of Licensor, and to Licensor, in the case of Parent.

(b) Decisions of the Joint Development Committee . Except as otherwise provided in this Agreement, in the event that the Joint Development Committee cannot reach a decision in any matter properly before it, Parent shall have final decision-making authority with respect to such matter, including approval and amendments of the Development Plan; provided , however , that any such matter under dispute shall first be referred to Parent and Licensor’s respective Presidents or chief executive officers, for attempted resolution by good faith negotiations within fourteen (14) days; further provided , that any final decision made by Parent shall (i) be consistent with the terms of this Agreement (including Licensee’s diligence obligations hereunder); (ii) not adversely affect the rights and obligations of Licensor, Licensee and Parent under this Agreement in a material manner; and (iii) not adversely affect the development, manufacture or commercialization of the Products in a material manner outside the Field and/or outside the Territory (as reasonably determined by either Party).

(c) Activities of the Joint Development Committee . The Joint Development Committee shall be responsible for establishing and approving the Development Plan.

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(d) Meetings of the Joint Development Committee . The Joint Development Committee shall hold its first meeting within ninety (90) days after the Effective Date and shall meet thereafter at least once per year in the Territory or on a schedule and at locations mutually determined by Parent and Licensor. The Joint Development Committee will convene at least monthly by teleconference and periodically in person in the U.S. to discuss and agree on the development of the Products in the Territory and share information relating thereto. Ad hoc meetings of the Joint Development Committee may be called by either Parent or Licensor upon reasonable advance notice to the other. Subject to Parent and Licensor’s mutual agreement, regular and ad hoc meetings may be face-to-face or by teleconference or videoconference. In addition to the designated members of the Joint Development Committee, each of Licensor and Parent shall be allowed to have such other of their respective representatives attend all meetings, provided that only the members of the Joint Development Committee designated in accordance with Section 3.4(a) , above, shall have voting rights.

(e) Joint Development Committee Expenses . Parent and Licensor shall respectively bear the expense of the participation of its representatives on the Joint Development Committee and in Joint Development Committee meetings.

3.5 Clinical Trials . Licensee shall be responsible for conducting or having conducted all clinical trials of the Product in the Territory and for paying all fees, costs and other expenses associated therewith.

3.6 Regulatory Approvals . Licensee shall be responsible for obtaining and maintaining all Regulatory Approvals necessary to conduct such pre-clinical studies, clinical trials and other supporting studies, and for paying all fees, costs and other expenses associated therewith.

3.7 Licensor’s Cooperation . As reasonably requested by Licensee, Licensor shall cooperate with and assist Licensee in obtaining any Regulatory Approvals necessary to conduct clinical trials and commercialization of the Product in the Territory. In connection therewith, Licensor shall provide Licensee upon request with copies of any regulatory materials and/or data as are reasonably necessary for these purposes.

3.8 Diligence . Licensee shall at all times exert no less than Commercially Diligent Efforts to develop the Product in the Territory, including seeking Regulatory Approval and Marketing Approval of the Product in the Territory. Licensee shall require any Affiliates, Sublicensees, and/or Third Parties it uses to develop the Product to use such efforts on Licensee's behalf. Without limiting the generality of the foregoing, Licensee’s failure to comply with Section 2.1(c) , above, shall constitute a failure to exert Commercially Diligent Efforts to develop the Product in the Territory.

3.9 Cooperation in Development . The Parties mutually acknowledge that, subject to other provisions of this Agreement, Licensor, Licensee and Parent shall closely collaborate (as the Parties may reasonably agree) in the development and commercialization of Product on a global basis. In furtherance of such collaboration, the Parties agree to share all non-clinical and clinical data, manufacturing, process and formulation data and any other information necessary for the development of the Products, which data shall constitute Confidential Information and be subject to the terms and conditions of Section 8 , and to provide each other the right to use and make reference to such data and information in each Party’s respective efforts to develop Products, in the case of Licensee, within the Field in the Territory, or in the case of Licensor, outside the Territory or outside the Field in the Territory.

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Section 4. Commercialization of Product

4.1 Commercialization Plan .

(a) Initial Commercialization Plan . Licensee shall provide Licensor with the plan for commercialization of the Product in the Territory (the “ Commercialization Plan ”) and will carry out all commercialization activities with respect to the Product in the Territory. The initial Commercialization Plan shall be provided to Licensor within one hundred eighty (180) days prior to the date on which the First Commercial Sale within the Territory is anticipated.

(b) Commercialization Activities . For purposes of this Agreement, commercialization activities shall mean all appropriate activities undertaken before and after Regulatory Approval relating specifically to the marketing, sale and distribution of the Product in the Territory, including, without limitation, (i) sales force detailing, advertising, education, planning, marketing, sales force training and distribution, (ii) scientific and medical affairs, and (iii) pricing and related terms for the Product.

4.2 Content of Commercialization Plan .

(a) Description of Activities . The Commercialization Plan (as amended, if needed) shall include a reasonable description of the activities that Licensee shall undertake in order to market the Product in the Territory, including, but not limited to, (i) media marketing plans, promotional activities and similar matters, including detailed budgets, and (ii) the identity of intended major Distributors and Sublicensees, if any.

(b) Net Sales Targets . The Parties acknowledge that, as of the Effective Date, specific Net Sales targets in any Marketing Year are difficult to determine. The Commercialization Plan shall specify a broad range of Net Sales targets that will be refined and updated in amendments to the Commercialization Plan as the Product in the Territory approaches Regulatory Approval.

4.3 Amendments to the Commercialization Plan . The Parties shall amend the Commercialization Plan at least once every twelve (12) months after the First Commercial Sale to refine the description of the activities specified in the initial Commercialization Plan and any subsequently amended Commercialization Plan, and to add other commercialization activities, to update the anticipated schedule and budgets for all such activities, and to update the Net Sales targets. Such amended Commercialization Plan shall comply with the provisions of Section 4.2 . If the Parties fail to update the Commercialization Plan as required by this Section 4.3 , the most recently approved Commercialization Plan shall continue in effect until such time as an amended Commercialization Plan becomes effective pursuant to this Section 4.3 .

4.4 Diligence . Licensee shall at all times exert no less than Commercially Diligent Efforts to promote, market and distribute at least one Product in the Territory. Licensee shall require any Affiliates, Sublicensees, Distributors, and/or other Third Parties it uses to promote, market and distribute the Product to use such efforts on Licensee's behalf.

4.5 Notification of Benchmarks and Milestones . Licensee shall report in writing to Licensor the date of the First Commercial Sale within the Territory and the achievement of any milestone specified in this Agreement within ten (10) days of such occurrences.

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Section 5. Royalties and License Fees

5.1 Royalties .

(a) Except as otherwise provided in Section 5.1(b) , on a quarterly basis in accordance with Section 5.1(a) , Licensee shall pay Licensor royalties on aggregate Net Sales during the Royalty Term at a rate of ***.

(b) Notwithstanding Section 5.1(a) , with respect to Net Sales for the Dry Eye Syndrome indication, on a quarterly basis in accordance with Section 5.1(a) , Licensee shall pay to Licensor (i) royalties on aggregate Net Sales made by Licensee and/or its Affiliates during the Royalty Term at a rate of ***, and (ii) with respect to such Net Sales made by any non-Affiliate of Licensee during the Royalty Term, royalties equal to the greater of (A) *** of any applicable royalties payable to Licensee or (B) royalties on such aggregate Net Sales made by such non-Affiliate of Licensee at a rate of ***, in either case of clauses (A) and (B), when and as received by Licensee.

(c) In case any Generic/Branded Generic of any Product by any Third Party becomes commercially available within the Territory without a direct or indirect agreement with the Licensee, its Affiliates or their Sublicensees or Distributors and such Generic/Branded Generic taken in the aggregate have according to IMS or similar data source a market share (in terms of unit quantity) in the Territory of at least ***, then the royalties’ rate applicable and payable by Licensee on the Net Sales in the Territory will be reduced by ***; provided , however , that if such Generic/Branded Generic taken in the aggregate have according to IMS or similar data source a market share of at least ***, then the royalties’ rate applicable and payable by licensee on the Net Sales in the Territory will be reduced by *** and that if such Generic/Branded Generic taken in the aggregate have according to IMS or similar data source a market share of at least ***, then the royalties’ rate applicable and payable by licensee on the Net Sales in the Territory will be reduced by ***.

(d) If it is necessary for Licensee to obtain a license from a Third Party under any Patent in a particular country in the Territory in order to use, make, or sell a Product and Licensee obtains such a license, Licensee may deduct, from the royalty payment that would otherwise have been due pursuant to Section 5.1(a) or 5.1(b) with respect to the Net Sales of the applicable Product in the Territory in a particular applicable quarterly period an amount equal to *** of the royalties paid by Licensee to such Third Party pursuant to such license on account of the sale of such Product in the Territory during such applicable quarterly period.

(e) Each payment of royalties required by this Section 5.1 shall be due and payable no later than sixty (60) days after the end of the quarterly period ending on June 30 and December 31, in which the applicable Net Sales were made.

5.2 Up-front and Other Milestone Payments and Percentage Ownership Adjustment .

(a) Licensee shall pay to Licensor a non-refundable sum of five hundred thousand dollars (US$500,000) within forty-five (45) Business Days following the Effective Date.

(b) Licensee shall promptly pay to Licensor a non-refundable sum of five hundred thousand dollars (US$500,000) upon the earlier of randomization or dosing of the first patient in either (i) a Phase 2b or a Phase 3 clinical trial evaluating the Product in patients with Dry Eye Syndrome or (ii) a Phase 3 clinical trial evaluating the Product in patients with Neurotrophic Keratopathy. A clinical trial of the Product shall satisfy the milestone requiring payment under this Section 5.2(b) whether such clinical trial is conducted by or on behalf of Licensee (or any of its Affiliates), any Sublicensee or any Third Party.

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5.3 Royalty Reports . Within thirty (30) days following the end of each quarterly period during the Royalty Term ending March 31, June 30, September 30 and December 31, Licensee shall deliver to Licensor a complete, detailed and accurate written report for the corresponding quarerly period showing (i) the gross amount of sales, on an item-by-item basis, of Products by Licensee, Sublicensees and Distributors to independent buyers (whether an end-user, wholesaler or otherwise) in bona fide arm’s length transactions; (ii) the adjustments resulting from the deductions in the definition of “Net Sales; (iii) total Net Sales and (iv) the conversion into United States Dollars, pursuant to Section 5.5 , of any such Net Sales made in another currency; and (v) the calculation of royalties due. Such report shall also reflect all Sublicense Fees payable to Licensee during such quarterly period.

5.4 Manner of Payments . All payments due Licensor under this Agreement shall be payable in United States Dollars by wire transfer of immediately available funds to such bank account(s) as Licensor shall designate, or by such other method as Licensor may reasonably designate.

5.5 Exchange Rate . When converting any amount in another currency into United States Dollars, Licensee shall use an exchange rate equal to New York foreign exchange rate quoted in the Wall Street Journal on the Business Day that is five (5) days prior to the date a payment under this Agreement is due.

5.6 Interest on Late Payments . Any payment not paid within thirty (30) calendar days from the date such payment is due under this Agreement shall be subject to interest from and including the date such payment is due through and including the date such payment is actually made at an annual rate equal to the sum of two percent (2%) plus the annual prime rate of interest quoted in the Money Rates Section of the Wall Street Journal calculated daily on the basis of a 365-day year, or, if such rate is not available for any reason, similar reputable data source, or, if lower, the highest rate permitted under applicable law. The payment of such interest shall not limit Licensor from exercising any other rights it may have as a consequence of the lateness of any payment.

5.7 Records; Audit Rights .

(a) Records . Licensee shall maintain, and shall require its Affiliates, Sublicensees and Distributors to maintain, during the Term and for a period of five (5) years thereafter, complete, detailed and accurate books and records in connection with the sale of Product as necessary to allow the accurate determination of any and all financial and accounting information relevant to either Party’s payment obligations hereunder, including without limitation as necessary for the calculation of the royalties due to Licensor hereunder.

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(b) Audit Rights .

(i) Licensor or its representative shall have the right to annually audit Licensee’s, its Affiliates’, its Sublicensees’ and its Distributors’ records as set forth in this Section 5.7 . Licensee shall permit Licensor or its representative to have access during normal business hours to such records of Licensee, its Affiliates and its Sublicensees as may be reasonably necessary to verify the accuracy of the royalty reports hereunder for any Marketing Year ending not more than five (5) years prior to the date of such request. Annual audits can take place no more often than once per each calendar year. Notice of Licensor’s intent to conduct an audit must be provided within thirty (30) days of Licensor’s receipt of the periodic royalty report reflecting full yearly sales of Product. Except as otherwise provided in Section 5.7(a) , Licensor shall be responsible for its own costs and expenses relating to any audit conducted under this Section 5.7(b)(i) . Licensee shall cause its Affiliates and Sublicensees to agree to make their records available for audit by Licensor or its representative as set forth in this Section 5.7 .

(ii) If any audit conducted by Licensor or its representative shows an underpayment of royalties to Licensor, Licensee shall remit to Licensor the amount of such underpayment within thirty (30) days after its receipt of Licensor’s request therefor. If an underpayment in royalties exceeds five percent (5%) of the total amount owed for the period then being audited, Licensee shall be responsible, and promptly shall reimburse Licensor, for Licensor’s reasonable out-of-pocket costs for conducting the audit. If any audit conducted by Licensor or its representative shows an overpayment of royalties to Licensor, such overpayment shall be refunded to Licensee promptly.

(c) Confidentiality . Licensor shall treat all financial information of Licensee, its Affiliates, Sublicensees and Distributors that Licensor reviews in connection with any audit conducted under this Section 5.7 as Confidential Information of Licensee subject to the provisions of Section 8 of this Agreement.

Section 6. Regulatory Matters

6.1 Regulatory Approvals . Licensee shall have the sole authority and responsibility to obtain in its own name and maintain any Regulatory Approvals and Marketing Approvals with respect to the Product in the Territory. Licensor shall, promptly after the Effective Date, provide Licensee with materials, including but are not limited to regulatory progress report, INDs issued by the FDA or the relevant local Regulatory Authority and a copy of any relevant data related to the Product and owned by Licensor that have been filed with the FDA. Only when Licensee is expressly prohibited from being a sponsor of any clinical trials of the Product conducted by Licensee by applicable Regulatory Law in the Territory, subject to the prevailing applicable Regulatory Law in the Territory, Licensor may have the right to be designated as the sponsor instead. Irrespective of the exercise of such rights, Licensee shall at all times be responsible for ensuring that any and all clinical trials are conducted in compliance with all applicable Regulatory Laws and other requirements of any Regulatory Authority in the Territory, and all Regulatory Laws and other requirements of any Governmental Authority (including any promulgated by the FDA) that would be applicable if such clinical trials were sponsored under Licensor’s IND or otherwise subject to the jurisdiction of the FDA.

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6.2 Contact with Governmental Authorities . Subject to the other provisions of this Section 6.2 , Licensee shall be solely responsible for responding to all inquiries, notices of violation, warning letters, serious adverse events (as such term is defined by applicable ICH guidelines or at 21 C.F.R. §312.32(a)), inspectional observations, and other actions from or by Governmental Authorities in the Territory, in each case to the extent related to the Product in the Territory. Licensor and Licensee shall immediately forward to each other copies of any material correspondence from any Governmental Authority that it receives in respect of the Product. Notwithstanding the other provisions of this Section 6.2 , Licensee shall not respond to any inquiries or other correspondence from a Governmental Authority with respect to the Product in the Territory without first providing Licensor with a copy of its proposed response, and incorporating any reasonable comments of Licensor in such response. Licensor shall cooperate with Licensee in responding to any inquiry or other correspondence from a Governmental Authority in a timely manner, including by promptly responding to all inquiries of Licensee relating thereto.

6.3 Regulatory Information . Each Party agrees to provide the other Party with all reasonable assistance and take all actions reasonably requested by the other Party that are necessary or desirable to enable the other Party to comply with any Law or other requirement of any Governmental Authority applicable to the Product. Such assistance and actions shall include, among other things, (a) informing the other Party, within five (5) Business Days, of receiving notice of any action by, or notification or other information which it receives (directly or indirectly) from any Governmental Authority that: (i) raises any material concerns regarding the safety or efficacy of the Product; (ii) indicates or suggests a potential material liability for either Party to Third Parties arising in connection with the Product; or (iii) is reasonably likely to lead to a field alert report, recall or market withdrawal of the Product; provided, that neither Party shall be obliged to disclose information in breach of any contractual restriction; and (b) Licensee immediately reporting to Licensor the occurrence of any adverse reaction (including without limitation death) or other incident during any clinical trial or medicinal exam and any other information so as to enable Licensor to fulfill its reporting obligations to any Governmental Authority, as further specified by the Safety Agreement.

6.4 Official Documentation . Licensee shall provide to Licensor one exact copy of any official registration and/or importation documents supplied by the relevant Regulatory Authorities immediately upon issuance. In case of early termination of this Agreement, Licensee shall provide to Licensor any original versions of such registrations and/or documents that are not otherwise in Licensor’s possession as per Section 12.3(a) .

6.5 Clinical Trial Reports . Without limiting any of Licensee’s obligations under this Agreement, Licensee shall be responsible for preparing the clinical trial yearly progress reports, clinical trial final report and any other reports as may be required by a Regulatory Authority in connection with clinical trials of the Product; provided , however , that Licensee shall provide drafts of such reports for Licensor’s knowledge prior to submission to the applicable Regulatory Authority and provide all final reports submitted to applicable Regulatory Authorities. With respect to all clinical trials for Products containing Tβ4 that are directly related to the development of Products in the Field and the Territory that have been completed prior to, or are in progress as of the date hereof, Licensor shall provide Licensee with copies of the related clinical trial reports, that Licensor has the right to disclose, promptly upon the execution hereof or upon the finalization of the report, as applicable.

6.6 Unknown Side Effects; Adverse Reactions .

(a) Reporting Unknown Side Effects and Adverse Reactions . Each Party shall provide promptly to the other Party any information and data relating to any serious or previously unknown side effects or adverse reactions relating to the Product that the providing Party receives from any source, as further specified in the Safety Agreement.

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(b) Safety Agreement . Promptly after the Effective Date and before the date that Licensee commences any clinical trials of the Product in the Territory, the Parties shall enter into a separate written safety agreement containing (i) appropriate provisions addressing safety issues relating to the Products, (ii) a description of the types of side effects and reactions that must be reported pursuant to Section 6.6(a) and any other complaints or information requests that must be reported, and (iii) such cooperative working procedures as are reasonably necessary to ensure that satisfactory systems and processes are in place to ensure the effective exchange of safety and other medical information relating to the Product (the “ Safety Agreement ”).

Section 7. Intellectual Property

7.1 Trademarks . Licensee shall be free to use Licensee’s Trademarks or any other Trademark(s) owned by the Licensee in the Territory for the Product.

7.2 Ownership of Inventions .

(a) Licensee Inventions . Subject to any licenses granted to Licensor herein, Licensee shall own all Inventions and Know-How that are invented, developed or conceived only by employees, consultants or contractors of Licensee (“ Licensee Inventions ”). Licensee shall have written agreements in place with its employees, consultants, and contractors giving Licensee all rights and authority necessary to grant the license in Section 7.3(a) .

(b) Licensor Inventions . Subject to any licenses granted to Licensee herein, Licensor shall own all Inventions and Know-How that are invented, developed or conceived only by employees, consultants or contractors of Licensor (“ Licensor Inventions ”). Licensor shall have written agreements in place with its employees, consultants, and contractors giving Licensor all rights and authority necessary to grant the license in Section 7.3(b) .

(c) Joint Inventions . Licensee and Licensor shall own jointly all Inventions and Know-How that are invented, developed or conceived by employees, consultants or contractors of both Licensee and Licensor (“ Joint Inventions ”). The Parties will agree on a case-by-case basis the appropriate allocation of cost and control concerning matters regarding the prosecution, maintenance, defense and infringement of Patents for such Joint Inventions.

7.3 Licenses to Certain Inventions .

(a) License Grant to Licensor . To the extent that any Licensee Invention or any Joint Invention relates to the development, promotion, marketing, distribution, manufacturing or sale of the Product, Licensee hereby grants to Licensor, and Licensor hereby accepts, for no additional consideration, an exclusive, perpetual, transferable, sublicensable (through multiple tiers) license under Licensee’s rights in such Licensee Invention or Joint Invention, as applicable, to research, develop, promote, market, distribute, manufacture, have manufactured, sell, offer for sale or import the Product outside the Territory and/or outside the Field during the term of this Agreement and, upon the termination of this Agreement for any reason, within the Territory and/or within the Field. The foregoing license shall include a right to use and make reference (transferable by Licensor to its Affiliates and sublicensees) to all regulatory filings made by Licensee in the Territory and all data and information generated by or on behalf of Licensee or derived or resulting from any activities conducted by or on behalf of Licensee pursuant to this Agreement, including all Licensee Product Data, for the development, manufacture and commercialization of any Product outside the Territory and/or outside the Field. Licensee shall promptly disclose all Licensee Inventions and Joint Inventions in writing to Licensor. If Licensor desires to use any such Licensee Invention and/or Joint Invention for the development, manufacture and commercialization of the Products outside the Territory and/or outside the Field, Licensor shall notify Licensee in writing.

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(b) License Grant to Licensee . To the extent that any Licensor Invention or any Joint Invention relates to the development, promotion, marketing, distribution, or sale of the Product, then such Licensor Invention or Licensor’s interest in such Joint Invention, as applicable, shall be deemed a Licensed Patent and shall be subject to the licenses granted to Licensee pursuant to Section 2.1 (a) . The Parties shall promptly disclose to the other Party all Inventions that are relevant to Products and subject to the Licenses granted hereunder.

(c) License to Parent . To the extent that any Licensee Invention or any Joint Invention relates to the development, promotion, marketing, distribution, manufacturing or sale of the Product, Licensee and Licensor each hereby grant to Parent, and Parent hereby accepts, for no additional consideration, an exclusive, transferable, sublicensable (through multiple tiers) license under Licensee’s rights in such Licensee Invention or Joint Invention, as applicable, to research, develop, promote, market, distribute, manufacture, have manufactured, sell, offer for sale or import the Product within the “Territory” as such term is defined in the Pan-Asia License Agreement, which license shall terminate at such time as the Pan-Asia License Agreement terminates.

7.4 Patent Marking . Licensee shall, and shall cause its Affiliates, Sublicensees and Distributors to mark all Products sold or otherwise distributed pursuant to this Agreement in accordance with the applicable patent statutes and other relevant regulations in the jurisdiction of the Territory in which such Product is manufactured, sold or otherwise distributed.

7.5 Prosecution and Maintenance of Licensed Patents licensed to Licensee in the Territory .

(a) Prosecution . As between Licensor and Licensee, Licensee shall have the right and obligation, at its sole cost and expense, to prepare, file, prosecute, and maintain the Licensed Patents in the Territory, and to pursue any proceeding (including interferences, re-examinations, examinations, protests, reissues, opposition proceedings and the like) relating to any of the Licensed Patents (collectively “ Prosecute ”) in the Territory, such costs and expenses shall be shared equally by the Parties. The Parties agree to utilize Licensor’s intellectual property counsel and counsel shall promptly provide Licensee with all information related to such prosecution. In the event that Licensee fails or otherwise elects not to Prosecute any Licensed Patent, it shall provide 90 day’s advance notice thereof, and following such 90-day period, Licensor shall have the right to Prosecute such Licensed Patent in the Territory at its expense and all of Licensee’s license or other rights to such Licensed Patents shall terminate.

(b) Cooperation . In connection with any of Licensee’s activities to Prosecute any of the Licensed Patents, Licensor shall cooperate fully and provide Licensee with any information or assistance that Licensee reasonably requests, including executing such documents as may be necessary with respect to such prosecution activity. If Licensor becomes aware of any patent, information, proceeding or other matter that may affect the preparation, filing, prosecution, or maintenance of any of the Licensed Patents or that may adversely impact the validity, scope, title or enforceability of any of the Licensed Patents, Licensor shall promptly notify Licensee of such patent, information, proceeding, or matter.

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7.6 Infringement by Third Parties .

(a) Notice . If Licensee learns of any actual or possible infringement of any Licensed Patent in the Territory, or any actual or possible misappropriation or misuse of Licensed Know-How, Licensee shall promptly notify Licensor of such infringement, misappropriation or misuse.

(b) Right to Bring Suit in the Territory .

(i) As between Licensor and Licensee, Licensee shall have the right, but not the obligation, to bring and control any legal action or proceeding with respect to any infringement of Licensed Patents or any misappropriation or misuse of Licensed Know-How by Third Parties in the Territory, at its own expense and using counsel of its own choice, but which is acceptable to Licensor in its reasonable discretion.

(ii) In the event that Licensee declines to take legal action with respect to any infringement of the Licensed Patents, Licensor shall have the right, after giving Licensee ten (10) working days’ prior notice of its intent to do so, to take such legal action at its own expense, with the concomitant right to choose legal counsel reasonably acceptable to Licensor and to determine legal strategy. Licensee shall have the right to participate in any such legal action using its own counsel, at its own expense.

(iii) For any action or proceeding brought by Licensor pursuant to this Section 7.6 , if Licensor is unable to initiate or prosecute such action solely in its own name, then Licensee shall join such action voluntarily and shall execute all documents necessary to initiate litigation to prosecute and maintain such action.

(iv) In connection with any action or proceeding brought by Licensor pursuant to this Section 7.6 , Licensee shall cooperate fully and will provide Licensor with any information or assistance that Licensor reasonably requests.

7.7 Certifications . Each Party shall inform the other Party of any certification related to the Product regarding any Licensed Patents it receives pursuant to either 21 U.S.C. §§ 355(b)(2)(A)(iv) or (j)(2)(A)(vii)(IV) or its successor provisions, or any equivalent regulations in any jurisdiction of the Territory, and shall provide the other Party with a copy of such certification within five (5) days of receipt by such Party. Licensor’s and Licensee’s rights with respect to the initiation and prosecution of any legal action as a result of such certification or any recovery obtained as a result of such legal action shall be as set forth in this Section 7 .

7.8 Defense of Third Party Claims .

(a) Notice . If either Party learns that a Third Party has commenced or plans to commence, either as a claim, a counterclaim, or an action for declaratory judgment, an action or proceeding challenging any of the Licensed Patents in any jurisdiction of the Territory, such Party shall promptly provide the other Party with notice thereof.

(b) Licensor’s Right to Defend . As between Licensor and Licensee, Licensor shall have the right, but not the obligation, to defend and control any claim, counterclaim or other action initiated by a Third Party challenging any of the Licensed Patents in any jurisdiction of the Territory (each a “ Challenge ”), at its own expense and using counsel of its own choice.

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(i) For the defense of any Challenge pursuant to this Section 7.8 , if Licensor is unable to initiate or prosecute such defense solely in its own name, then Licensee (subject to any necessary approval of the relevant court) shall join such action voluntarily and shall execute all documents necessary to initiate litigation to prosecute and maintain such action.

(ii) In connection with the defense of any Challenge brought by Licensor pursuant to this Section 7.8 , Licensee shall cooperate fully and will provide Licensor with any information or assistance that Licensor reasonably requests.

7.9 Awards and Recovery . Any recovery obtained by either Party in connection with or as a result of any action contemplated by Section 7.6 or 7.8 , whether by settlement of otherwise, shall be shared as follows:

(a) such recovery shall first be allocated to the Party directing the prosecution or defense of such action for reimbursement in respect of its respective out-of-pocket costs and expenses incurred in connection therewith; and

(b) any remaining amounts after such reimbursement shall be split equally by the Parties.

Section 8. Confidentiality and Press Releases

8.1 Confidential Information . Except to the extent expressly authorized by this Agreement, or otherwise agreed in writing by the Parties, the Parties agree that the receiving Party (the “ Receiving Party ”) shall keep confidential and shall not publish or otherwise disclose or use for any purpose other than as provided for in this Agreement any Confidential Information which is disclosed to it by the other Party (or an Affiliate thereof) (each, a “ Disclosing Party ”), except to the extent that the Receiving Party can demonstrate by competent written evidence that such Confidential Information:

(a) was already legally in the possession of the Receiving Party, other than under an obligation of confidentiality, at the time of disclosure by the Disclosing Party;

(b) was generally available to the public or otherwise part of the public domain at the time of its disclosure to the Receiving Party;

(e) is independently discovered or developed by the Receiving Party without the use of Confidential Information provided by the Disclosing Party.

8.2 Exceptions . The obligations of this Section 8 shall not apply to Confidential Information that:

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(a) is submitted to Governmental Authorities by the Receiving Party to facilitate the issuance of any Regulatory Approval for the Product, or to obtain, maintain, enforce or defend Patents (in each case only to the extent permitted by this Agreement; provided that (A) such disclosure may be only to the extent reasonably necessary to obtain Regulatory Approvals or Patents, as applicable, (B) the Receiving Party shall take reasonable measures to assure confidential treatment of such information to the extent applicable, and (C) the Receiving Party shall give [ten (10)] Business Days’ prior written notice to the Disclosing Party of such disclosure of Confidential Information, including the scope, detail, and nature of such Confidential Information;

(c) is otherwise required to be disclosed by the Receiving Party in compliance with Laws (including, without limitation and for the avoidance of doubt, the requirements of the U.S. Securities and Exchange Commission and any other stock exchange or market on which securities issued by a Party are traded) or order by a court or other Governmental Authority having competent jurisdiction; provided , however , that the Receiving Party shall first give written notice to the Disclosing Party in order to allow the Disclosing Party the opportunity to seek confidential treatment of the Confidential Information. Confidential Information that is disclosed pursuant to Law or an order by a court or other Governmental Authority shall remain otherwise subject to the confidentiality and non-use provisions of this Section 8 , and the Party disclosing Confidential Information pursuant to a Law or order by a court or other Governmental Authority shall take all reasonable steps necessary, including without limitation obtaining an order of confidentiality, to ensure the continued confidential treatment of such Confidential Information.

8.3 Disclosure to PHS . Licensor may disclose certain Confidential Information of Licensee to PHS in order to comply with the PHS License. In such event, such Confidential Information shall be subject to the applicable confidentiality provisions of the PHS License.

8.4 Return of Confidential Information Upon Expiration or Termination of Agreement . Within thirty (30) days after any expiration or termination of this Agreement, each Party shall destroy (and certify to the other Party such destruction) or return (as requested by the other Party) all Confidential Information provided by the other Party except as otherwise set forth in this Agreement, and except that each Party may retain a single copy of the Confidential Information in its confidential legal files for the sole purpose of ascertaining its ongoing rights and responsibilities regarding the Confidential Information and for defending or enforcing its legal rights.

8.5 Written Agreements . The Receiving Party shall have in effect or obtain written agreements from each of its employees, consultants and contractors who have access to Confidential Information of the Disclosing Party, which agreements shall obligate such persons to similar obligations of confidentiality, and to assign to the Receiving Party all Know-How, information and Inventions conceived, made or reduced to practice by such persons during the course of performing the Receiving Party’s obligations under this Agreement. Each Party will notify the other Party promptly upon discovery of any unauthorized use or disclosure of the Confidential Information of the other Party.

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8.6 Remedies . Each Party shall be entitled, in addition to any other right or remedy it may have, at law or in equity, to seek an injunction, without the posting of any bond or other security, enjoining or restraining the other Party from any violation or threatened violation of this Section 8 .

8.7 Prior Confidentiality Agreement . Nothing contained in this Section 8 is intended to supersede the terms and conditions of any confidential disclosure or similar agreement between Licensor, on one hand, and Parent and its Affiliates, on the other. Any such agreements shall remain in effect with respect to disclosures made thereunder prior to the Effective Date.

8.8 Press Releases . Except as required by Law (including, without limitation and for the avoidance of doubt, the requirements of the U.S. Securities and Exchange Commission, the American Stock Exchange, the Korean Stock Exchange, and any other stock exchange on which securities issued by a Party are traded) or any Governmental Authority, neither Party shall make any press release or other public announcement relating to this Agreement or the transactions described herein without the prior written consent of the other Party.

Section 9. Representations, Warranties and Covenants

9.1 Licensor Representations, Warranties and Covenants . Licensor hereby represents, warrants and covenants to Licensee as follows:

(a) the execution, delivery and performance by Licensor of this Agreement and the consummation of the transactions contemplated hereby are within Licensor’s corporate powers and have been duly authorized by all necessary corporate action on the part of Licensor. This Agreement constitutes the legal, valid and binding obligation of Licensor, enforceable against Licensor in accordance with its terms;

(b) the execution, delivery and performance of this Agreement by Licensor will not violate any Law or any order of any Governmental Authority;

(c) except as may be required to permit the sale or exportation of Product into the Territory from time to time during the Term, the execution, delivery or performance of this Agreement by Licensor will not require Licensor to obtain any permits, authorizations or consents from any Governmental Authority, and such execution, delivery and performance will not result in a material breach of or give rise to any termination of any agreement or contract to which Licensor is a Party;

(d) Licensor has all right and authority to grant the licenses granted in Section 2 of this Agreement;

(e) to the best of Licensor’s knowledge, without any investigation or due inquiry, all issued Licensed Patents are valid;

(f) Licensor has not received any written communication from a third party alleging that Licensor’s practice of the Licensed Patents infringes the right of such third party; and

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(g) Licensor, its Affiliates, and its and their respective employees, agents, contractors and consultants have never been (i) debarred or (ii) convicted of a crime for which a person can be debarred, under Section 306(a) of the Generic Drug Enforcement Act of 1992 (Section 306 (a) or (b)) or similar Laws of any foreign jurisdiction. Licensor, its Affiliates, and its and their respective employees, agents, contractors and consultants have never been (i) threatened to be debarred or (ii) indicted for a crime or otherwise engaged in conduct for which a person can be debarred, under Section 306(a) or (b) of the Generic Drug Enforcement Act of 1992 or similar Laws of any other jurisdiction. Licensor shall promptly notify Licensee upon learning of any such debarment, conviction, threat or indictment.

9.2 Licensee Representations, Warranties and Covenants . Licensee hereby represents, warrants and covenants to Licensor as follows:

(a) the execution, delivery and performance by Licensee of this Agreement and the consummation of the transactions contemplated hereby are within Licensee’s corporate powers and have been duly authorized by all necessary corporate action on the part of Licensee. This Agreement constitutes the legal, valid and binding obligation of Licensee, enforceable against Licensee in accordance with its terms;

(b) Licensee will be at all times properly registered, licensed and qualified, and have all requisite power and authority under its organizational documents and in accordance with the Laws of the Territory to develop (including without limitation the conduct of clinical trials), promote, market, distribute, import, export and sell the Product in the Territory, and to conduct its business and perform its obligations hereunder and, during the Term, it shall take all action as may be required and necessary to obtain and keep current any governmental licenses, permits, registrations and approvals (including without limitation Regulatory Approvals) that are necessary or advisable for it to carry out its activities hereunder;

(c) the execution, delivery and performance of this Agreement by Licensee will not violate any Law or any order of any Governmental Authority;

(d) except for Regulatory Approvals and as may be required to permit the sale or importation of Product from time to time into the Territory during the Term, the execution, delivery or performance of this Agreement by Licensee will not require Licensee to obtain any permits, authorizations or consents from any Governmental Authority, and such execution, delivery and performance will not result in a material breach of or give rise to any termination of any agreement or contract to which Licensee is a Party;

(e) Licensee, its Affiliates, and its and their respective employees, agents, contractors and consultants have never been (i) debarred or (ii) convicted of a crime for which a person can be debarred, under Section 306(a) of the Generic Drug Enforcement Act of 1992 (Section 306 (a) or (b)) or similar Laws of any foreign jurisdiction. Licensee, its Affiliates, and its and their respective employees, agents, contractors and consultants have never been (i) threatened to be debarred or (ii) indicted for a crime or otherwise engaged in conduct for which a person can be debarred, under Section 306(a) or (b) of the Generic Drug Enforcement Act of 1992 or similar Laws of any other jurisdiction. Licensee shall promptly notify Licensor upon learning of any such debarment, conviction, threat or indictment;

(f) Licensee and its Affiliates and its and their respective employees, agents, contractors and consultants shall not use any Person on a Prohibited List in connection with the performance of any of its obligations or activities under this Agreement;

(g) Licensee shall carry out its obligations and activities under this Agreement, including the development, promotion, marketing, distribution and sale of Products, in accordance with: (i) the terms hereof, (ii) all applicable Laws and Regulatory Laws, and any subsidiary legislation thereunder; and (iii) GCP, GLP and GMP;

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(h) As of the Effective Date, Licensee believes in good faith that it will have sufficient financial resources available to carry out, or to have carried out, all of its obligations and activities contemplated under this Agreement;

(i) Licensee and its Affiliates shall not develop, promote, market, distribute, or sell during the Term any product in the Field, EXCEPT as authorized, permitted, or agreed otherwise herein, that utilizes or otherwise contains Tβ4 or any derivatives, analogs or fragments thereof without Licensor’s prior written approval; and

(j) Licensee shall not reverse engineer or otherwise deconstruct any API or component part of finished Product for the purpose of developing a product that would compete with the Product in the Field.

9.3 Disclaimer of Warranties . EXCEPT AS SET FORTH IN THIS AGREEMENT, NEITHER PARTY GIVES ANY OTHER WARRANTY, EXPRESS OR IMPLIED REGARDING THE PRODUCTS, THE LICENSED KNOW-HOW, THE LICENSED PATENTS, OR THE SCOPE OR VALIDITY THEREOF. ALL OTHER WARRANTIES, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT ARE EXPRESSLY DISCLAIMED.

Section 10. Indemnification

10.1 Indemnification by Licensor . Licensor shall defend, indemnify and hold harmless Licensee, its Affiliates, and its and their respective officers, directors, employees and agents from and against any and all losses, liabilities, claims, damages, penalties, fines, costs and expenses (including reasonable legal fees and other litigation costs, regardless of outcome) (collectively “ Losses ”) arising as a result of (a) any breach of representations or warranties of Licensor provided in Section 9.1 ; (b) any Product Liability Claims or mandatory or voluntary recall of the Product in any jurisdiction of the Territory, if and to the extent that such Losses are caused by (i) failure of any Product provided by Licensor to conform to the relevant specifications therefor as specified with any clinical supplies provided to Licensee; or (ii) any willful act or negligence of Licensor and/or its manufacturer of clinical supplies in relation to the Product; provided, however, that Licensor shall have no obligation under this Section 10.1 if Licensee or any of its Affiliates, Sublicensees or Distributors has been negligent, whether in testing, storing, handling or otherwise dealing with the Product, or in case such Losses arise out of or are attributable to any breach of this Agreement by Licensee.

10.2 Indemnification by Licensee . Licensee shall defend, indemnify and hold harmless Licensor, its Affiliates, and its and their respective officers, directors, employees and agents from and against any and all Losses arising as a result of (a) any breach of representations or warranties of Licensee provided in Section 9.2 ; and (b) any and all Third Party claims if and to the extent that such Losses are caused by Licensee’s and/or any Affiliate’s, Sublicensee’s or Distributor’s manufacture, storage, development, use, promotion, marketing, distribution, and sale of the Product, provided, however, that Licensee shall have no obligation under this Section 10.2 if Licensor and/or its manufacturer have been negligent, whether in manufacturing, testing, storing, handling or otherwise dealing with the Product, or in the case said claims arise out of or are attributable to any breach of this Agreement by Licensor.

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10.3 Procedures . The Party seeking indemnification under this Section 10 (the “ Indemnified Party ”) shall give prompt notice to the Party against whom indemnity is sought (the “ Indemnifying Party ”) of the assertion or commencement of any claim for indemnification pursuant to this Section 10 , and shall provide the Indemnifying Party such information with respect thereto that the Indemnifying Party may reasonably request. The failure to give such notice will relieve the Indemnifying Party of its indemnification obligations hereunder only to the extent that the Indemnifying Party has suffered actual prejudice thereby. The Indemnifying Party shall assume and control the defense and settlement of any such action, suit or proceeding at its own expense. The Indemnified Party shall, if requested by the Indemnifying Party, cooperate in all reasonable respects in such defense, at the Indemnifying Party’s expense, subject to the following. The Indemnified Party will be entitled at its own expense to participate in such defense and to employ separate counsel for such purpose. For so long as the Indemnifying Party is diligently defending any action, suit or proceeding pursuant to this Section 10 , the Indemnifying Party will not be liable under this Section 10 for any settlement effected without its consent. No Party shall enter into any compromise or settlement which commits the other Party to take, or to forbear to take, any action without the other Party’s prior written consent.

10.4 Consequential Damages . NEITHER LICENSOR, ON ONE HAND, NOR LICENSEE AND PARENT ON THE OTHER, SHALL BE LIABLE TO OR OTHERWISE RESPONSIBLE TO THE OTHER PARTY HERETO FOR ANY LOSS OF PROFITS, DIMINUTION IN VALUE, OR INCIDENTAL, INDIRECT, CONSEQUENTIAL, SPECIAL, EXEMPLARY OR PUNITIVE DAMAGES THAT ARISE OUT OF OR RELATE TO THIS AGREEMENT OR THE PERFORMANCE OR BREACH HEREOF OR OTHERWISE AND WHETHER IN CONTRACT, TORT, STRICT LIABILITY OR OTHERWISE; PROVIDED, THAT, THE FOREGOING LIMITATION SHALL NOT APPLY: (I) TO A PARTY’S INDEMNIFICATION OBLIGATIONS PURSUANT TO SECTIONS 10.1 AND 10.2 ABOVE; (II) TO ANY GROSSLY NEGLIGENT ACT OR WILLFUL MISCONDUCT OF A PARTY; OR (III) TO A PARTY’S BREACH OF ITS CONFIDENTIALITY OBLIGATIONS PURSUANT TO SECTION 9 HEREOF.

10.5 Insurance .

(a) General Liability . Each Party shall maintain as and when available comprehensive general liability insurance, including blanket contractual liability insurance through the Term and for five (5) years thereafter, which insurance shall afford limits of not less than US$3,000,000 for each occurrence for bodily injury liability, personal injury liability, products liability, property damage liability, contractual liability and completed operations liability. Each Party shall ensure that such insurance will include coverage for defense costs.

(b) Product Liability . Each Party shall maintain as and when available and thereafter throughout the Term product liability insurance on commercially standard terms for the pharmaceutical manufacturing industry, with a reputable insurer, in an amount not less than US$5,000,000 per occurrence and US$5,000,000 in the annual aggregate.

(c) Certificate of Insurance . Each Party will provide, upon request and as and when available, the other with certificate(s) of insurance evidencing the above and showing the name of the issuing company, the policy number, the effective date, the expiration date and the limits of liability. Each Party shall cause its insurance policy to name the other Party hereto as an additional insured. Each Party’s general liability insurance policy shall contain a waiver of subrogation rights which that Party’s insurer(s) may have against the other Party.

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Section 11. Information and Reporting

11.1 Licensee may examine, upon reasonable prior written request having been made to Licensor, but not more than twice per year, the books, records and accounts of Licensor. Licensee shall be entitled to receive reasonable information, including management accounts and operating statistics and other business and financial information, which exist at the time of request, to keep it properly informed about the business and affairs of Licensor and relevant to its interest as a shareholder.

11.2 Licensor shall provide reasonable access to Licensee’s personnel, upon reasonable notice and during normal business hours, but not more than twice per year, to access such books, records, accounts and other information relating to Licensor, which exist at the time of request, as may be necessary for them to review the information provided to Licensee pursuant to Section 11.1 .

11.3 Any information or documents provided to or made available for review by Licensee shall constitute Confidential Information and shall be protected accordingly as provided under Section 8 above.

Section 12. Term and Termination

12.1 Term and Rules Post Expiration: This Agreement shall enter into full force and effect at the Effective Date and, as provided under this Section 12 , the term of this Agreement (the “ Term ”) shall be on a Product by Product basis and shall continue until the expiration of the last-to-expire valid and applicable patent within the patent rights in the Territory, or following twenty five (25) years from the First Commercial Sale of each Product in the Territory, whichever is later.

12.2 Term and Rules Post Termination :

(a) Termination for Cause . In the event any Party (or an Affiliate of a Party, as applicable) is in breach of any material obligation under this Agreement, the JV Agreement or the Pan-Asia License Agreement (the “ Breaching Party ”), the non-breaching Party may give written notice to the Breaching Party specifying the claimed particulars of such breach, and in the event such material breach is not cured, within sixty (60) days following the date of such written notification, without prejudice to any other rights and remedies available at any time to the non-breaching Party, the non-breaching Party shall have the right thereafter to terminate this Agreement; provided , however , that if such breach is incapable of being cured, then such termination may be effective immediately upon such written notice to the Breaching Party. Notwithstanding the foregoing, Licensor shall have the right to terminate this Agreement in the event Licensee fails to timely make the payments required by Section 5.2 of this Agreement and such failure continues for ten (10) Business Days following such written notice.

(b) Termination for Governmental Action . Either Party may terminate this Agreement upon ten (10) days’ prior written notice in the event that any Governmental Authority takes any action or raises any objection (“ Governmental Action ”) that prevents Licensee, for a period of not less than one hundred eighty (180) days, from importing, exporting, purchasing or selling the Product in the Territory, or that has the effect of making Licensor’s manufacture of the Product unlawful.

(c) Termination by Licensor for Patent Challenge . Licensor may terminate this Agreement in its entirety immediately upon written notice to Licensee if Licensee or its Affiliates (including Parent), Sublicensees or Distributors (directly or indirectly, individually or in association with any person or entity) challenges the validity, enforceability or scope of any Licensed Patents anywhere in the world.

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(d) Termination or Conversion Pursuant to the PHS License . In the event that PHS terminates the PHS License under Article 13 therein or rescinds a Licensed Field of Use (as that term is defined in the PHS License) that includes any portion of the Field in which Licensee is licensed hereunder, Licensee may, at its option:

(i) terminate this Agreement; or

(ii) convert this Agreement to a license between Licensee, on the one hand, and Licensor and PHS, on the other hand, with such conversion subject to the approval of PHS, which shall not be unreasonably withheld, and contingent upon Licensee’s acceptance of all of the provisions of the PHS License .

(e) Termination for Bankruptcy . To the extent permitted under applicable Law, if at any time during the Term, an Event of Bankruptcy (as defined below) relating to either Party (the “ Bankrupt Party ”) occurs, the other Party (the “ Other Party ”) shall have, in addition to all other legal and equitable rights and remedies available hereunder, the option to terminate this Agreement upon sixty (60) days written notice to the Bankrupt Party. It is agreed and understood that if the Other Party does not elect to terminate this Agreement upon the occurrence of an Event of Bankruptcy, except as may otherwise be agreed with the trustee or receiver appointed to manage the affairs of the Bankrupt Party, the Other Party shall continue to make all payments required of it under this Agreement as if the Event of Bankruptcy had not occurred, the Bankrupt Party shall not have the right to terminate any license granted herein. The term “Event of Bankruptcy” means: (i) filing in any court or agency pursuant to any statute or regulation of any state or country, a petition in bankruptcy or insolvency or for reorganization or for an arrangement or for the appointment of a receiver or trustee of the Bankrupt Party or of its assets; (ii) proposing a written agreement of composition or extension of a Bankrupt Party’s debts; (iii) being served with an involuntary petition against the Bankrupt Party, filed in any insolvency proceeding, and such petition shall not be dismissed within sixty (60) days after the filing thereof; (iv) proposing or being a party to any dissolution or liquidation when insolvent; or (v) making an assignment for the benefit of creditors. Without limitation, the Bankrupt Party’s rights under this Agreement shall include those rights afforded by 11 U.S.C. § 365(n) of the United States Bankruptcy Code (the “Bankruptcy Code”) and any successor thereto. If the bankruptcy trustee of a Bankrupt Party as a debtor or debtor-in-possession rejects this Agreement under 11 U.S.C. § 365(o) of the Bankruptcy Code, the Other Party may elect to retain its rights licensed from the Bankrupt Party hereunder (and any other supplementary agreements hereto) for the duration of this Agreement and avail itself of all rights and remedies to the full extent contemplated by this Agreement and 11 U.S.C. § 365(n) of the Bankruptcy Code, and any other relevant laws.

12.3 Effects of Termination .

(a) In the event of early termination of this Agreement for any reason: (i) all rights and licenses granted to Licensee under this Agreement shall terminate (including all rights and licenses with respect to Licensed Patents and Licensed Know-How), and (ii) Licensee shall transfer to Licensor all data, files, records, information and other materials (including clinical supplies of Product and including the originals of any registrations and/or importation documents as specified in Section 6.4) in its possession or control relating to, containing or comprising the Product, including Licensor’s Confidential Information.

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

(b) Transfer of Materials . In the event of early termination of this Agreement for any reason:

(i) to the extent not transferred pursuant to Section 13.3(a), Licensee shall provide to Licensor a copy of any and all documentation and data owned by Licensee and in tangible form at the time of termination of the Agreement that has been generated with respect to the Product and is necessary to enable Licensor to continue development of a Product and the commercialization thereof in the Territory (collectively, the “ Licensee Product Data ”), and Licensor may use such Licensee Product Data at its discretion on an exclusive basis, to the extent necessary to enable Licensor, its Affiliates and Third Parties on behalf of Licensor or its Affiliates to continue to develop and commercialize a Product in the Territory; and

(ii) if such termination occurs after a Product has received Regulatory Approval, Licensee shall, if permitted under applicable Law, promptly transfer and deliver to Licensor original copies of any and all Regulatory Approvals obtained in connection with the Product in the Territory (including any and all official registrations, licenses, permits, certificates, and/or importation documents issued by Regulatory Authorities in the Territory), as well as any and all regulatory documentation and applications for Regulatory Approval submitted to Regulatory Authorities in the Territory in connection with the Product; Licensor shall pay Licensee’s direct, out-of-pocket costs for compliance with this Section 12.3(b)(ii) ;

(iii) to the extent that any Regulatory Approval is issued in the name of Licensee, its Affiliates, Sublicensees or other designee, Licensee shall, to the extent permitted by applicable Law, promptly assign or procure the assignment to Licensor (or its designee) such Regulatory Approvals, and in the event assignment is not permitted under applicable Law or cannot be carried out for any other reason, the Licensee shall take all steps that are necessary and/or desirable to assist Licensor to obtain such Regulatory Approvals in the name of Licensor (or its designee) in the Territory, with such actions including without limitation coordinating with the applicable Regulatory Authority, furnishing all necessary information and documents in respect thereof, and promptly cancelling and terminating (as necessary) all Regulatory Approvals held by the Licensee, its Affiliate(s), Sublicensee(s) and/or other designee(s) which are not otherwise assignable or transferable to the Licensor (or its designee); Licensor shall pay Licensee’s direct, out-of-pocket costs for compliance with this Section 12.3(b)(iii) ; and

(iv) Licensee shall assign (or cause its Affiliates to assign) to Licensor all agreements with any Third Party with respect to the conduct of clinical trials for the Product, including agreements with contract research organizations, clinical sites and investigators, unless expressly prohibited by any such agreement or unless such agreement covers clinical trials for products in addition to the Products (in which case Licensee shall cooperate with Licensor in all reasonable respects to secure the consent of such Third Party to such assignment or to the conclusion of a new agreement between the Licensor and the Third Party on terms substantially similar to the agreement between Licensee and the Third Party), and Licensor shall assume all obligations under all such agreements.

(c) Survival of Sublicenses . All sublicenses granted by Licensee to Sublicensees shall survive termination of this Agreement, and Licensor shall assume all such sublicenses as the Licensor thereunder in accordance with the terms of such sublicenses; provided , however , that Licensor may elect to terminate any such sublicenses, and Licensor shall not be required under this Section 12 to assume obligations under any such sublicense that are greater in scope than those set forth in this Agreement.

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

(d) Remedies for Termination . Expiration or termination of this Agreement by either Party shall not affect any claim, demand, liability or right of a Party arising pursuant to this Agreement prior to such termination or expiration hereof.

12.4 Survival . The following provisions shall survive the termination or expiration of this Agreement: Section 5 (with respect to Net Sales made prior to expiration or termination of this Agreement), 6.3, 6.6(a), 8, 11, 12.3, 12.4, 13 and 14 , and all provisions of the PHS License that are binding on Licensee and are specified in the PHS License as surviving the expiration or termination thereof.

Section 13. Parent Cooperation

13.1 Cooperation . Parent acknowledges and agrees that, subject to other provisions of this Agreement, it will closely collaborate (as the Parties may reasonably agree) in the development and commercialization of Product on a global basis. In furtherance of such collaboration, Parent agrees to share all Know-How, non-clinical and clinical data, manufacturing, process and formulation data and any other information necessary for the development of the Products, which data shall constitute Confidential Information and be subject to the terms and conditions of Section 8 . In addition, each of Licensor and Licensee shall have the right and license to such data and information in order to utilize, reference and otherwise have the benefit of such data and information to support the further development of Products, including without limitation, in submissions to a Regulatory Authority for purposes of obtaining Regulatory Approval or otherwise, in the case of Licensee, within the Field in the Territory, or in the case of Licensor, outside the Territory, within the Territory but outside the Field during the term of this Agreement, or in the Field and the Territory upon the termination or expiration of this Agreement.

13.2 Guaranty . Parent, on behalf of itself and its successors and assigns, hereby unconditionally guarantees each and every obligation of Licensee under this Agreement, and agrees that it shall be jointly and severally liable to Licensor with respect to all such Licensee obligations hereunder.

Section 14. Miscellaneous

14.1 Waiver . The waiver by any Party of a breach of any provision of this Agreement shall not operate, or be construed, as a waiver of any subsequent breach.

14.2 Modification . No change, modification, or waiver of any term of this Agreement shall be valid unless it is in writing and signed by both Parties.

14.3 Entire Agreement . This Agreement (including all exhibits and attachments hereto, all of which are incorporated herein by reference) constitutes the entire agreement between the Parties (and their Affiliates) with respect to the subject matter hereof and thereof, and supersedes all prior agreements and understandings, whether oral or written, between the Parties, except for the Confidential Disclosure Agreement described in Section 8.7 .

14.4 English Language . This Agreement is written and executed in the English language. Any translation into any other language shall not be an official version of this Agreement and in the event of any conflict in interpretation between the English version and such translation, the English version shall prevail.

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

14.5 Assignment . Except as expressly permitted otherwise in this Agreement, Licensor and Licensee may not assign its rights or delegate its obligations hereunder to any Person, whether by a Change of Control or otherwise, without first obtaining the written consent of other Party, which consent shall not be unreasonably withheld; provided, that either Party may, without the consent of the other Party, assign its rights or delegate its obligations hereunder to any of its Affiliates upon (30) thirty days’ prior written notice to the other Party. All sublicenses granted to Affiliates or Third Parties in accordance with this Agreement shall be subject to all terms, conditions, obligations and covenants of this Agreement and all applicable provisions of the PHS License. No such assignment shall remove or mitigate the obligations or liability of assigning Party unless otherwise agreed in writing by non-assigning Party.

14.6 Independent Contractor . This Agreement shall not be construed as constituting a partnership, joint venture or any other form of legal association that would impose liability upon one Party for the act or failure to act of the other Party, or as providing either Party with the right, power or authority (express or implied) to create any duty or obligation of the other Party.

14.7 Third Party Beneficiaries . Any sublicense granted by Licensee to an Affiliate or Third Party pursuant to Section 2.1(c) is intended by the Parties to be a third party beneficiary of this Agreement; provided that such Sublicense is in compliance with all of its obligations under any such sublicense to the extent that such obligations are required under this Agreement. Except as expressly provided in this Section 14.7 , the Parties do not intend, nor will any Section of this Agreement be interpreted, to create for any person any third party beneficiary rights.

14.8 Disputes . Disputes regarding the scope, validity or enforceability of Patents are excluded from this Section 14.8

(a) Good Faith Negotiations by Officers . In the event of disputes between the Parties arising out of or relating to this Agreement, or the breach, termination (other than termination for convenience in accordance with Section 12.2(c) ) or invalidity thereof, a Party seeking to resolve such dispute will, by written notice to the other, have such dispute referred to their respective chief executive officers, for attempted resolution by good faith negotiations within fourteen (14) days after such notice is received.

(b) Mediation . In the event that the Parties are unable to resolve a dispute through good faith negotiations pursuant to Section 14.8(a) , the Parties agree to submit such dispute to non-binding mediation using an industry expert mutually acceptable to the Parties. The costs of any such mediation shall be shared by the Parties equally.

(c) Arbitration . If all good faith attempts to resolve a dispute through negotiations and mediation pursuant to Sections 14.8(a) and (b) have failed after sixty (60) days from notice provided pursuant to Section 14.8(a) , then upon the request of either Party, the dispute shall be finally resolved by binding arbitration administered by I.C.C. Arbitration (the “ ICC Rules ”).

(i) The arbitration shall be conducted by a panel of three neutral arbitrators (the “ Panel ”) appointed in accordance with the ICC Rules.

(ii) The arbitration proceedings shall take place in New York USA. The arbitral proceedings and all pleadings shall be in the English language.

(iii) The Panel shall have the power to decide all questions of arbitrability.

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

(iv) At the request of either Party, the Panel will enter an appropriate protective order to maintain the confidentiality of information produced or exchanged in the course of the arbitration proceedings.

14.9 Notices . Except as otherwise provided herein, all notices or other communications hereunder shall be deemed sufficient if given in writing, via registered mail (return receipt requested), postage paid, or by reputable high speed delivery service ( e.g. , FedEx) or by courier addressed to the appropriate Party at the address set forth below, or at such other place as such Party may designate in writing to the other Party.

If to Licensor:

RegeneRx Biopharmaceuticals, Inc.

15245 Shady Grove Road, Suite 470

Rockville, Maryland 20850 U.S.A.

Attn: President and CEO

Phone: (301) 208-9191

Fax: ( 301) 208-9194

With a copy to:

Todd A. Taylor, Esq.

Fredrikson & Byron, P.A.

200 South 6th Street, Suite 4000

Minneapolis, Minnesota 55402 U.S.A.
Direct: (612) 492-7355

Fax: (612) 492-7077

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

If to Licensee:	ReGenTree, LLC 22 ^nd FL, Parkview Tower 248 Jungjail-ro, Bundang-gu Seongnam-si, Gyeonggi-do 463-863 Republic of Korea Attn: CEO Phone: +82 31 786 7700 Fax.: +82 31 786 7801
With a copy to:	Yoon & Yang LLC Asem Tower 19F, 517 Yeongdongdaero, Gangnam-gu Seoul 135-798, Korea Attn: Sung-Jin Kim Esq. Direct: +82 2 6003 8335 Fax: +82 2 6003 7835
If to Parent:	G-treeBNT Co., Ltd. 22 ^nd FL, Parkview Tower 248 Jungjail-ro, Bundang-gu Seongnam-si, Gyeonggi-do 463-863 Republic of Korea Attn: CEO Phone: +82 31 786 7700 Fax.: +82 31 786 7801
With a copy to:	Yoon & Yang LLC Asem Tower 19F, 517 Yeongdongdaero, Gangnam-gu Seoul 135-798, Korea Attn: Sung-Jin Kim Esq. Direct: +82 2 6003 8335 Fax: +82 2 6003 7835

All such notices shall be effective upon receipt.

14.10 Governing Law . This Agreement shall be governed and construed in accordance with the laws of New York, USA without regard to its principles of conflict of laws. The Parties agree to exclude the application to this Agreement of the United Nations Convention on Contracts for the International Sale of Goods.

14.11 Severability . The provisions of this Agreement are severable. If any item or provision of this Agreement shall to any extent be invalid or unenforceable, the remainder of this Agreement shall not be affected thereby, and each term and provision of this Agreement shall be valid and shall be enforced to the fullest extent permitted by law. The Parties will use diligent good faith efforts to revise this Agreement as and to the extent reasonably necessary to effectuate their original intent and purpose under this Agreement.

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

end of page
[ signatures appear on following page]

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

IN WITNESS WHEREOF, this Agreement has been executed by a duly authorized officer of each Party as of the Effective Date.

	RegeneRx Biopharmaceuticals, Inc.

	By:	/s/ J.J. Finkelstein
	Name: J.J. Finkelstein
	Title: President & CEO

	ReGenTree, LLC

	By:	/s/ Won S. Yang
	Name: Won S. Yang
	Title: President & CEO

Solely with respect to its obligations under Section 133.4( c) 3.97.3(c)10.4 of this Agreement, this Agreement has been duly executed and acknowledged by a duly authorized officer of Parent as of the Effective Date:

	G-treeBNT Co., Ltd.

	By:	/s/ Won S. Yang
	Name: Won S. Yang
	Title: President & CEO

Exhibits

Exhibit A – Licensed Patents

Exhibit B – PHS License Terms Applicable to Licensee

Exhibit C – Development Plan

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

Exhibit A

LICENSED PATENTS

Summary of OPHTHALMIC Patents and Patent Applications with Relevant Claims in the United States

2600-

Country

Serial No. or

Patent No.

Priority Date

Filing Date

Projected
Expiration
Date ¹

Status

Independent Claims

124

United States

7,268,118

7-30-1998

5-26-2004

7-29-2019

Issued

1. A composition comprising a polypeptide comprising amino acid sequence LKKTET [SEQ ID NO:1] or a conservative variant thereof, the composition further comprising a carrier for application to a surface of human body, wherein said carrier is for application to an external surface of said body or to an internal surface of said body, the composition comprising a gel, cream, paste, lotion, spray, suspension, dispersion, salve, hydrogel or ointment, wherein said polypeptide is gelsolin, vitamin D binding protein (DBP), profilin, cofilin, depactin, DnaseI, villin, fragmin, severin, capping protein, beta- actinin, acumentin, TB4, TB4ala, TB9, TB10, TB11, TB12, TB13, TB14, or TB15 , wherein said polypeptide is at a concentration in said carrier of at least about 0.01 ng/ml, and up to about 60 micrograms per 300 microliter.

7. A composition comprising a polypeptide agent consisting essentially of TB4, TB4ala, TB9, TB10, TB11, TB12, TB13, TB14, or TB15, the composition further comprising a carrier for application to a surface of a human body, wherein said carrier is for application to an external surface of said body or to an internal surface of said body, the composition comprising a gel, cream, paste, lotion, spray, suspension, dispersion, salve, hydrogel or ointment, wherein said polypeptide is at a concentration in said carrier of at least about 0.01 ng/ml, and up to about 60 micrograms per 300 microliter.

¹ Expiration dates for U.S. patents cannot be calculated with certainty until after issuance. Dates marked with an asterisk (*) and any date calculated for a pending application in the U.S. are estimated dates which may change due to potential patent term extension, the potential effects of one or more terminal disclaimers, or for other reasons. Expiration dates in foreign countries generally are twenty years from the filing date of the international (PCT) application on which they are based, but are not always calculated in this manner. Laws are subject to change.

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

A- 1

2600-

Country

Serial No. or

Patent No.

Priority Date

Filing Date

Projected
Expiration
Date ¹

Status

Independent Claims

190

United States

8,383,576

6-17-2005

6-19-2006

03-04-2030

Issued

1. A method of treating elevated intraocular pressure in a subject having elevated intraocular pressure, comprising administering to the subject an ophthalmically acceptable composition comprising a peptide agent comprising amino acid sequence LKKTET (SEQ ID NO:1) or Thymosin β4 (Tβ4).

250

United States

13/876,767

9-30-2010

9-29-2011

9-29-2031*

Pending

1. A method of providing a desired concentration of administered thymosin beta 4 (TB4) in a body portion of a live human patient in need thereof, at a predetermined time t, which comprises:

(a) determining a thymosin beta 4 treatment dosage (D) using Formula I

C = (A)D • t ^-B (Formula I),

wherein C is the predetermined concentration at time t, in ng/mL, D is the dosage of thymosin beta 4 to be administered to said live human patient in mg, t is the time elapsed after administration of dosage D in hours, A is about 30 to about 38, and B is about 0.5 to about 1; and

(b) administering said dosage (D) of thymosin beta 4 to said live human patient so as to achieve said desired concentration of administered thymosin beta 4 in said body portion.

22. A method of providing a desired concentration of administered thymosin beta 4 (TB4) in a body portion of a live human patient in need thereof, at a predetermined time, t, which comprises:

(a) determining a time (t) for administering a thymosin beta 4 treatment dosage (D) using Formula I

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

A- 2

2600-

Country

Serial No. or

Patent No.

Priority Date

Filing Date

Projected
Expiration
Date ¹

Status

Independent Claims

C = (A)D • t ^-B (Formula I),

(b) administering said dosage (D) of thymosin beta 4 to said live human patient so as to achieve said desired concentration of administered thymosin beta 4 in said body portion.

23. A method of maintaining TB4 concentration within an efficient TB4 concentration range in a body portion of a live human patient in need thereof, over time, comprising:

(a) selecting a target TB4 concentration, C, in said body portion,

(b)

(b) maintaining said TB4 concentration within said efficient TB4 concentration range by administering TB4 to said live human patient by calculating (1) the dosage amount to be administered, D, and (2) the time at which said dosage amount, D, is administered, t, according to Formula I:

C = (A)D • t ^-B (Formula I),

wherein C is a target TB4 concentration in ng/mL, wherein D is the treatment dosage to said live human patient in mg, wherein t is the time elapsed after an initial administration of TB4 to said live human patient in hours, wherein A is about 30 to about 28, and wherein B is about 0.5 to about 1;

(c) administering said treatment dosage, D, of TB4 to said live human patient at time, t, so as to achieve said target concentration of administered TB4; and

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

A- 3

2600-

Country

Serial No. or

Patent No.

Priority Date

Filing Date

Projected
Expiration
Date ¹

Status

Independent Claims

(d) repeating (b) and (c) to maintain the concentration of TB4 in said body portion within ± 10% of said target concentration, C.

24. A method of treatment to provide a desired concentration range of TB4 in a body portion of a live human patient in need thereof, over a period of time while minimizing the total amount of TB4 which is administered over said period of time, t, which comprises:

(a) selecting a desired concentration, C, of TB4 to be achieved in said live human patient;

(b) calculating a TB4 dosage amount, D, to be administered to said live human patient using Formula I:

C = (A)D • t ^-B (Formula I),

wherein C is said desired concentration, C, in ng/mL, D is said treatment dosage to said live human patient in mg, t is about 1 hour, A is about 30 to about 38, and B is about 0.5 to about 1;

(d) calculating a TB4 dosage amount, D, to be administered to said live human patient using Formula I:

C = (A)D • t ^-B (Formula I),

wherein C is said desired concentration, C, in ng/mL, D is said treatment dosage to said live human patient in mg, t is other than about 1 hour, A is about 30 to about 38, and B is about 0.5 to about 1;

(e) calculating the total amount of TB4 that is to be administered daily in (d);

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

A- 4

2600-

Country

Serial No. or

Patent No.

Priority Date

Filing Date

Projected
Expiration
Date ¹

Status

Independent Claims

(f) determining whether the total amount of TB4 to be administered in (b) or in (d) is lower; and

(g) administering TB4 to said live human patient at the dosage amount, D, and time, t, which results in said lower total amount of administered TB4 to said live human patient.

255

United States

13/219394

6-17-2005

8-26-2011

6-19-2026*

Pending

1. A method of treating dry eye syndrome in a subject suffering from dry eye syndrome, comprising administering to the subject an ophthalmically acceptable composition twice per day [or more], wherein said composition has a pH of about 6.8-8.1 and comprises an isolated peptide agent comprising amino acid sequence LKKTET (SEQ ID NO.: 1) or Thymosin β4 (Tβ4), wherein said peptide agent is present in said aqueous medium at a concentration within a range of about 0.001 – 1,000 mg/ml.

16. A method of treating dry eye syndrome in a subject suffering from dry eye syndrome, comprising administering to the subject an ophthalmically acceptable composition twice per day [or more], wherein said composition comprises an isolated peptide agent comprising amino acid sequence LKKTET (SEQ ID NO.: 1) or Thymosin β4 (Tβ4), wherein said ophthalmically acceptable composition has a pH of about 6.8-7.4, and wherein said peptide agent is present in said aqueous medium at a concentration within a range of about 0.001 – 1,000 mg/ml.

18. A method of treating dry eye syndrome in a subject suffering from dry eye syndrome, comprising administering to the subject an ophthalmically acceptable composition twice per day [or more], wherein said composition comprises an isolated peptide agent comprising Thymosin β4 (Tβ4), wherein said ophthalmically acceptable composition has a pH of about 6.8-7.4, wherein said Tβ4 is present at a concentration within a range of about 1 – 10 mg/ml.

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

A- 5

Exhibit B

PHS LICENSE TERMS

APPLICABLE TO LICENSEE

Terms in bold have the meanings given such terms in the PHS License.

5.01

PHS reserves on behalf of the Government an irrevocable, nonexclusive, non-transferable, royalty-free license for the practice of all inventions licensed under the Licensed Patent Rights throughout the world by or on behalf of the Government and on behalf of any foreign government or international organization pursuant to any existing or future treaty or agreement to which the Government is a signatory. Prior to the First Commercial Sale , Licensee agrees to provide PHS reasonable quantities of Licensed Products or materials made through the Licensed Processes solely for PHS research use and not for purposes of commercial development, manufacture or distribution, at a price equal to Licensee’s cost of such.

5.02

Licensee agrees that products used or sold in the United States embodying Licensed Products or produced through use of Licensed Processes shall be manufactured substantially in the United States, unless a written waiver is obtained in advance from PHS .

5.03

Licensee acknowledges that PHS may enter into future Cooperative Research and Development Agreements (CRADAs) under the Federal Technology Transfer Act of 1986 that relate to the subject matter of this Agreement . PHS agrees to notify Licensee , as soon as is practical of any proposed CRADA that relates to the subject matter of this Agreement . Licensee agrees not to unreasonably deny requests for a Research License from such future collaborators with PHS when acquiring such rights is necessary in order to make a Cooperative Research and Development Agreement (CRADA) project feasible. As of the effective date of this Agreement , Licensee requests that Licensee have an opportunity to join as a party to any proposed Cooperative Research and Development Agreement (CRADA).

5.04

In addition to the reserved license of Paragraph 5.01 above, PHS reserves the right to grant such nonexclusive Research Licenses directly or to require Licensee to grant nonexclusive Research Licenses on commercially reasonable terms. The purpose of this Research License is to encourage basic research, whether conducted at an academic or corporate facility. In order to safeguard the Licensed Patent Rights , however, PHS shall consult with Licensee before granting to commercial entities a Research License or providing to them research samples of Licensed Products or materials made through the Licensed Processes , provided however that PHS will not provide materials obtained from Licensee under Paragraph 5.01 above to third parties, except with Licensee’s prior written consent, which shall not be unreasonably withheld.

8.01

Licensee agrees to keep accurate and correct records of Licensed Products made, used, sold, or imported and Licensed Processes practiced under this Agreement appropriate to determine the amount of royalties due PHS . Such records shall be retained for at least five (5) years following a given reporting period and shall be available during normal business hours upon five (5) business days prior written notice from PHS to Licensee for inspection at the expense of PHS by an accountant or other designated auditor selected by PHS for the sole purpose of verifying reports and payments hereunder. The accountant or auditor shall only disclose to PHS information relating to the accuracy of reports and payments made under this Agreement. If an inspection shows an under reporting or underpayment in excess of five percent (5%) for any twelve (12) month period, then Licensee shall reimburse PHS for the cost of the inspection at the time Licensee pays the unreported royalties, including any late charges as required by Paragraph 9.08 of this Agreement . All payments required under this Paragraph shall be due within thirty (30) days of the date PHS provides Licensee notice of the payment due.

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

B- 1

10.01

Licensee shall use its reasonable best efforts to bring the Licensed Products and Licensed Processes to Practical Application . “Reasonable best efforts” for the purposes of this provision shall include substantial adherence to the Commercial Development Plan at Appendix F and substantial performance of the Benchmarks at Appendix E as may be amended from time to time by mutual written consent. The efforts of sublicensees and Affiliates shall be considered the efforts of Licensee . To the extent that the Benchmarks or development obligations set forth in Appendix E differ from or conflict with those set forth in the Commercial Development Plan in Appendix F, Appendix E shall be considered to supersede Appendix F and the Commercial Development Plan in Appendix F shall be amended to be consistent with Appendix E.

10.02

Upon the First Commercial Sale , until the expiration of this Agreement , Licensee shall use its reasonable best efforts to make Licensed Products and Licensed Processes reasonably accessible to the United States public.

12.05

Licensee shall indemnify and hold PHS , its employees, students, fellows, agents, and consultants (the “Indemnified Parties” ) harmless from and against all liability, demands, damages, expenses, and losses, including but not limited to death, personal injury, illness, or property damage (the “Indemnified Losses” ) suffered by an Indemnified Party in connection with or arising out of a) the use by or on behalf of Licensee , its sublicensees, directors, employees, or third parties of any Licensed Patent Rights , or b) the design, manufacture, distribution, or use of any Licensed Products , Licensed Processes or materials by Licensee , or other products or processes developed in connection with or arising out of the Licensed Patent Rights . Licensee agrees to maintain a liability insurance program consistent with sound business practice. Notwithstanding any other provision to the contrary, Licensee shall have no obligation to indemnify an Indemnified Party from an Indemnified Loss in connection with or arising out of the design, manufacture, distribution or use of any Licensed Product or Licensed Process by or on behalf of the Indemnified Party .

13.05

PHS shall specifically have the right to terminate or, with Licensee’s consent, modify, at its option, this Agreement , if PHS determines that the Licensee : 1) is not using its reasonable best efforts to effectuate the Commercial Development Plan submitted with its request for a license and the Licensee cannot otherwise demonstrate to PHS’s satisfaction that the Licensee has taken, or can be expected to take within a reasonable time, effective steps to achieve Practical Application of the Licensed Products or Licensed Processes ; 2) has not used its reasonable best efforts to achieve the Benchmarks as my be modified under Paragraph 9.02; 3) has willfully made a false statement of, or willfully omitted, a material fact in the license application or in any report required by this Agreement ; 4) has committed a material breach of a covenant or agreement contained in the license; 5) is not keeping Licensed Products or Licensed Processes reasonably available to the public after commercial use commences; 6) cannot reasonably satisfy unmet health and safety needs; or 7) cannot reasonably justify a failure to comply with the domestic production requirement of Paragraph 5.02 unless waived. In making this determination, PHS will take into account the normal course of commercial development programs conduct with sound and reasonable business practices and judgment and the annual reports submitted by Licensee under Paragraph 9.02. Prior to invoking this right, PHS shall give written notice to Licensee providing Licensee specific notice of, and a ninety (90) day opportunity to respond to, PHS’s concerns as to the previous items 1) to 7). If Licensee fails to alleviate PHS’s concerns as to the previous items 1) to 7) or fails to initiate corrective action to PHS’s reasonable satisfaction, PHS may terminate this Agreement .

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

B- 2

13.07

PHS reserves the right according to 35 U.S.C. § 209(1)(4) to terminate or modify this Agreement if it is determined that such action is necessary to meet requirements for public use specified by federal regulations issued after the date of the license and such requirements are not reasonably satisfied by Licensee .

13.08

Within thirty (30) days of receipt of written notice of PHS’s unilateral decision to modify or terminate this Agreement , Licensee may, consistent with the provisions of 37 C.F.R. 404.11, appeal the decision by written submission to the designated PHS official. The decision of the designated PHS official shall be the final agency decision. Licensee may thereafter exercise any and all administrative or judicial remedies that may be available.

13.09

Within ninety (90) days of expiration or termination of this Agreement under this Article 13, a final report shall be submitted by Licensee . Any royalty payments, including those incurred but not yet paid (such as the full minimum annual royalty), and those related to patent expense, due to PHS shall become immediately due and payable upon termination or expiration. If terminated under this Article 13, sublicensees may elect to convert their sublicenses to direct licenses with PHS and Licensee pursuant to Paragraph 4.03.

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

B- 3

Exhibit C

DEVELOPMENT PLAN (SUBJECT TO CHANGE)

Development plan for treatment of Dry Eye Syndrome in the US

Type B, PreIND meeting with FDA was held on April 2006 to discuss the sponsor’s development plans for T β 4 for the treatment of corneal eye injuries/wounds.

Expected regulatory paths for DE are considered PreIND meeting, optional clinical studies, PreNDA meeting, NDA submission and NDA approval.

PreIND Meeting

PreIND meeting with FDA is being planned in 2Q of 2015 to discuss Clinical Study Designs and CMC requirements prior to initiating optional clinical studies which are being planned from 3Q of 2015 to 2Q of 2017 and one study design among 4 alternatives shall be selected based upon FDA comments during PreIND meeting and risk/feasibility assessment results with regulatory/clinical experts.

Optional Clinical Studies

4 alternative clinical study designs such as Option A, Option B, Option C and Option D are being planned from 3Q of 2015 to 2Q of 2017. Each optional study design consists of phase 2b and 3 studies with relevant patient # and treatment arms.

√ Option A

- Small Phase 2b (Patient # 150, 3 Arms)

- Large Phase 3 (Patient # 300, 2 Arms)

√ Option B

- Large Phase 2b (Patient # 240, 3 Arms)

- Small Phase 3 (Patent # 120~200, 2 Arms)

√ Option C

- Adaptive Design Phase 2b/3 (Patient # 240, 3 Arms)

√ Option D

- Large Phase 2b (Patent # 300, 3 Arms)

- Korean Phase 2b/3 (Patient # 400, 3 Arms)

PreNDA meeting

Pre NDA meeting with FDA is being planned in 3Q of 2017 prior to NDA submission.

NDA Submission

NDA Submission is being planned in 3Q of 2017.

C- 1

NDA Approval

NDA Approval is expected in 2Q of 2018.

Development plan for treatment of Neurotrophic Keratopathy in the US

Type-B, EOP2 meeting with FDA was held on September 2014 to discuss the planned phase 3 clinical and nonclinical development of T β 4 for treatment of neurotrophic keratopathy (NK).

Expected regulatory paths for NK are considered Type C CMC meeting, Phase 3 clinical study, PreNDA meeting, NDA submission and NDA approval.

Type C Meeting for CMC

The Type C meeting with FDA is being planned in 2Q of 2015 to discuss pending CMC issues which were not discussed with FDA prior to initiating Phase 3 Study. Contract manufacturing organization (CMO) for Clinical trial material (CTM) manufacturer is to be selected in 1Q of 2015 based upon risk assessment results which are planning with GMP and regulatory experts.

Phase III Clinical Study

Subject enrollment is to be planned as 42 patients with 2 Arms and study duration is expected approximately 6 weeks (i.e., treatment and Follow Up periods considered 4 weeks and 2 weeks each). Primary endpoint is being considered that percentage of patients who are achieving complete healing of the persistent epithelial defect determined by corneal fluorescein staining at 4 weeks. Considering the nature of the orphan indication and the limited patient population, site feasibility assessment for successful patient recruitment is to be initiated in 1Q to 2Q of 2015 for the purpose of initiating Phase 3 study in 3Q of 2015.

PreNDA meeting

Pre NDA meeting with FDA is being planned in 4Q of 2016 prior to NDA submission.

NDA Submission

NDA Submission is being planned in 4Q of 2016.

NDA Approval

NDA Approval is expected in 2Q of 2017.

INFORMATION MARKED BY [***] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

C- 2

EXHIBIT 31.1

CERTIFICATION

I, J.J. Finkelstein, certify that:

I have reviewed this quarterly report on Form 10-Q of RegeneRx Biopharmaceuticals, Inc.;

Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

Based on my knowledge, the condensed financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of condensed financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 15, 2015
	/s/J.J. Finkelstein
	J.J. Finkelstein
	President and Chief Executive Officer
	(Principal Executive Officer, Principal Financial Officer, and Principal Accounting Officer)

EXHIBIT 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of RegeneRx Biopharmaceuticals, Inc. (the “Company”) for the period ended March 31, 2015 (the “Report”), I, J.J. Finkelstein, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company as of and for the periods presented in the Report.

This certification accompanies this Report to which it relates, shall not be deemed “filed” with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Report), irrespective of any general incorporation language contained in such filing.

Date: May 15, 2015
	/s/J.J. Finkelstein
	J.J. Finkelstein
	President and Chief Executive Officer
	(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)