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

The Pain Group is based in West Chester, Pennsylvania and has offices in Salt Lake City, Utah. The focus of the Pain Group is on the development and commercialization of topically delivered pain products. The Pain Group management team has extensive expertise and experience in the areas of topical and analgesic drug formulation, development regulatory and clinical affairs and commercial execution in the areas of out-licensing and sales and marketing.

Data Resources estimates that the 2008 analgesic pain market was approximately $30 billion in the U.S. with projected growth to over $47 billion by the year 2023.  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, because so little drug is in the circulation, drug-drug interactions are minimized.

The Company's topical and transdermal drug delivery platform is based on the use of molecular skin penetration enhancers - transdermal carriers - to deliver drugs into and through the skin directly to the site of pain. The Company's first topical pain product Pennsaid for the treatment of the signs and symptoms of osteoarthritis (OA) of the knee, is approved in several countries including the United States, Canada and several European countries. Pennsaid combines a transdermal carrier (dimethyl sulfoxide, popularly known as DMSO) with diclofenac sodium, a leading non-steroidal anti-inflammatory drug (NSAID). Pennsaid delivers the active drug through the skin directly to the site of pain. Studies demonstrate that topical NSAIDs reduce the potentially serious systemic side effects associated with conventional oral NSAIDS. Mallinckrodt Inc., a Covidien plc company (Covidien) launched Pennsaid in the United States in April 2010 and pays Nuvo a royalty based on net sales.

Pennsaid's follow-on product, Pennsaid 2%, which has completed phase 2 studies, is similar to Pennsaid, but has the viscosity of a gel, twice-a-day dosing and faster drying time. Our licensee, Covidien has assumed responsibility for development activities and expenses associated with Pennsaid 2%.

The Investigational New Drug (IND) application for our lead early stage product, NRI-ANA, a novel topical lidocaine spray formulation, was cleared by the U.S. Food and Drug Administration (FDA) in June 2011 allowing for initiation of Phase 1 studies.

We also recently broadened our product and product candidate pipelines with the acquisition of ZARS Pharma Inc., a specialty pharmaceutical company focused on the development and commercialization of topically administered drugs using proprietary drug delivery technologies, primarily in the area of pain management and dermatology. ZARS has two approved pain products - Pliaglis and Synera, a product pipeline and two key 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 close to FDA regulatory approval or already commercialized. To assist us in evaluating products for development in our own portfolio or products we may acquire, we seek the advice of our Pain Group Advisory Board consisting of renowned scientists, researchers, doctors and regulatory experts. They advise and assist management in the evaluation of potential drug candidates, drug development plans and specific issues relating to the Company’s business.