Dr. Bradley S. Galer, MD
President, Pain Group

The Pain Group is based in West Chester, Pennsylvania with an office in Salt Lake City, Utah. The focus of the Pain Group is the development and commercialization of topically delivered pain products. The Pain Group management team has extensive expertise and experience in topical and oral analgesic drug development, regulatory affairs, medical affairs and commercialization.

Data Resources estimates that the 2011 analgesic pain market was approximately $20 billion in the U.S. The large size and growth of the analgesic drug market is being influenced by several factors, including an aging population and the increased awareness of patients and physicians of the need for more effective and safe pain management treatments. The role of topical analgesics is rapidly expanding. Many patients cannot tolerate side effects caused by their oral pain medication and would prefer to obtain similar pain relief with locally acting medications. Locally acting topical analgesics have the potential to exhibit a safer side effect profile, as they deliver the drug directly to the pain site through the skin, resulting in lower levels of the active ingredient entering the blood stream compared to oral medications. In addition, a much smaller amount of drug is in the circulation, and therefore, drug-drug interactions are minimized.

Pennsaid®, the Company's first commercialized pain product, a topical non-steroidal anti-inflammatory drug (NSAID), is used to treat the signs and symptoms of osteoarthritis (OA) of the knee. Pennsaid is sold in the United States by Mallinckrodt Inc. (Mallinckrodt), the pharmaceuticals business of Covidien, in Canada by Paladin Labs Inc. and in several European countries. Pennsaid combines a transdermal carrier (dimethyl sulfoxide, popularly known as DMSO) with diclofenac sodium, a leading NSAID. Pennsaid delivers the active drug through the skin directly to the site of pain. Studies demonstrate that Pennsaid reduces the potentially serious systemic side effects associated with conventional oral NSAIDS, while providing the same degree of pain and symptom relief.

Pennsaid's follow-on product, Pennsaid 2%, which has completed several studies including a phase 2 efficacy study, contains 2% diclofenac sodium compared to 1.5% for original Pennsaid. It is more viscous than original Pennsaid, is supplied in a convenient metered dose pump bottle and is applied twice each day compared to four times a day for original Pennsaid. Our licensee, Mallinckrodt has assumed responsibility for U.S. development activities and expenses associated with Pennsaid 2%. In July 2012, Mallinckrodt advised Nuvo that the U.S. Food and Drug Administration (FDA) had accepted the New Drug Application (NDA) for Pennsaid 2% for review. The FDA set a Prescription Drug User Fee Act (PDUFA) date of March 4, 2013 for action on the submission.

Through the acquisition of ZARS Pharma Inc. in May 2011, we acquired two approved pain products - Pliaglis® and Synera®, a topical pain product pipeline, and two novel proprietary technology platforms: CHADD™ and Peel.

Given our strengths, we are continuing to look at opportunities to broaden our pipeline to include additional later stage clinical drug candidates which are close to FDA regulatory approval or are already commercialized.