Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities 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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Website, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

~~The number of shares outstanding~~Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the ~~registrant’s Common Stock, $.01~~Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐ No ☐

As of October 31, 2019, the registrant had 163,226,089 shares of common stock, $0.01 par value ~~as of November 1, 2017 was~~ ~~156,674,504~~.per share, outstanding.

	September 30,			December 31,			September 30,			December 31,
	2017			2016			2019			2018
	(Unaudited)						(Unaudited)
Assets
Current Assets:
Cash and cash equivalents	$	27,433,489		$	27,714,588		$	41,874		$	27,892
Short-term investments		9,976,984			—
Accounts receivable		10,146,966			9,073,173			33,931			18,976
Inventories		7,942,376			5,326,962			16,503			11,350
Deferred costs		1,213,507			1,773,446
Contract assets								6,199			10,442
Prepaid expenses and other current assets		1,680,208			1,376,299			1,429			2,648
Total current assets		58,393,530			45,264,468			99,936			71,308
Equipment, molds, furniture and fixtures, net		17,296,719			17,867,412			15,409			14,895
Patent rights, net		1,630,785			2,044,608
Operating lease right-of-use assets								5,462			—
Goodwill		1,095,355			1,095,355			1,095			1,095
Intangibles, net								508			831
Other assets		53,778			53,607			519			148
Total Assets	$	78,470,167		$	66,325,450		$	122,929		$	88,277
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	8,245,154		$	7,884,983		$	16,530		$	11,135
Accrued expenses and other liabilities		6,394,379			5,872,846			14,966			11,997
Long-term debt, current portion								—			3,043
Operating lease liabilities, current portion								975			—
Deferred revenue		2,842,801			6,149,087			1,412			1,018
Total current liabilities		17,482,334			19,906,916			33,883			27,193
Long-term debt		24,791,214			—			40,269			22,083
Deferred revenue – long term		200,000			1,200,000
Operating lease liabilities, long-term								4,362			—
Total liabilities		42,473,548			21,106,916			78,514			49,276
Stockholders’ Equity:
Preferred Stock: $0.01 par, authorized 3,000,000 shares, none outstanding		—			—
Common Stock: $0.01 par; 300,000,000 shares authorized; 156,425,904 and 155,167,677 issued and outstanding at September 30, 2017 and December 31, 2016, respectively		1,564,259			1,551,677
Preferred Stock: $0.01 par; 3,000 shares authorized, none outstanding								—			—
Common Stock: $0.01 par; 300,000 shares authorized; 163,204 and 159,721 issued and outstanding at September 30, 2019 and December 31, 2018, respectively								1,632			1,597
Additional paid-in capital		301,703,929			297,826,433			326,895			314,907
Accumulated deficit		(266,570,874	)		(253,445,306	)		(283,406	)		(276,800	)
Accumulated other comprehensive loss		(700,695	)		(714,270	)		(706	)		(703	)
		35,996,619			45,218,534			44,415			39,001
Total Liabilities and Stockholders’ Equity	$	78,470,167		$	66,325,450		$	122,929		$	88,277

	For the Three Months Ended						For the Nine Months Ended						For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,						September 30,						September 30,
	2017			2016			2017			2016			2019			2018			2019			2018
Revenue:
Product sales	$	13,327,525		$	11,049,840		$	30,708,750		$	30,580,889		$	24,687		$	11,597		$	63,607		$	33,641
Development revenue		1,485,091			2,101,203			7,894,640			6,466,974
Licensing revenue		19,486			38,618			1,057,204			128,040
Licensing and development revenue														1,211			2,554			4,365			5,624
Royalties		220,295			289,102			815,421			850,022			8,408			3,717			18,053			5,468
Total revenue		15,052,397			13,478,763			40,476,015			38,025,925			34,306			17,868			86,025			44,733
Cost of revenue:
Cost of product sales		7,600,180			7,206,280			16,681,689			18,670,363			12,510			6,982			33,791			20,195
Cost of development revenue		922,717			827,441			3,677,363			3,457,197			552			307			2,658			1,240
Total cost of revenue		8,522,897			8,033,721			20,359,052			22,127,560			13,062			7,289			36,449			21,435
Gross profit		6,529,500			5,445,042			20,116,963			15,898,365			21,244			10,579			49,576			23,298
Operating expenses:
Research and development		3,289,445			5,958,550			9,535,089			15,554,599			2,863			3,191			7,744			9,321
Selling, general and administrative		8,185,865			5,622,937			23,013,130			20,240,635			16,385			8,747			46,407			24,866
Total operating expenses		11,475,310			11,581,487			32,548,219			35,795,234			19,248			11,938			54,151			34,187
Operating loss		(4,945,810	)		(6,136,445	)		(12,431,256	)		(19,896,869	)
Operating income (loss)														1,996			(1,359	)		(4,575	)		(10,889	)
Interest expense		(625,938	)		—			(794,129	)		—			(1,097	)		(674	)		(2,470	)		(1,959	)
Other income		119,227			15,462			197,003			58,313			144			97			323			199
Net loss	$	(5,452,521	)	$	(6,120,983	)	$	(13,028,382	)	$	(19,838,556	)
Basic and diluted net loss per common share	$	(0.03	)	$	(0.04	)	$	(0.08	)	$	(0.13	)
Basic and diluted weighted average common shares outstanding		156,400,702			155,060,811			155,851,639			154,952,060
Net income (loss)													$	1,043		$	(1,936	)	$	(6,722	)	$	(12,649	)
Net income (loss) per common share, basic and diluted													$	0.01		$	(0.01	)	$	(0.04	)	$	(0.08	)
Weighted average common shares outstanding:
Basic														163,119			157,471			162,109			157,076
Diluted														168,503			157,471			162,109			157,076

For the Three Months Ended

For the Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

Net loss

$
(5,452,521
)

$
(6,120,983
)

$
(13,028,382
)

$
(19,838,556
)
Foreign currency translation adjustment

(3,621
)

2,632

13,575

(7,820
)
Comprehensive loss

$
(5,456,142
)

$
(6,118,351
)

$
(13,014,807
)

$
(19,846,376
)

	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2019			2018			2019			2018
Net income (loss)	$	1,043		$	(1,936	)	$	(6,722	)	$	(12,649	)
Foreign currency translation adjustment		(2	)		(2	)		(3	)		(2	)
Comprehensive income (loss)	$	1,041		$	(1,938	)	$	(6,725	)	$	(12,651	)

	Common Stock										Accumulated
	Shares		Amount		Additional Paid-In Capital			Accumulated Deficit			Other Comprehensive Loss			Total Stockholders’ Equity
June 30, 2019		163,053	$	1,630	$	325,075		$	(284,449	)	$	(704	)	$	41,552
Common stock issued under equity compensation plan, net of shares withheld for taxes		9		1		(14	)		—			—			(13	)
Exercise of options		142		1		189			—			—			190
Share-based compensation		—		—		1,645			—			—			1,645
Net income		—		—		—			1,043			—			1,043
Other comprehensive loss		—		—		—			—			(2	)		(2	)
September 30, 2019		163,204	$	1,632	$	326,895		$	(283,406	)	$	(706	)	$	44,415


	Common Stock										Accumulated
	Shares		Amount		Additional Paid-In Capital			Accumulated Deficit			Other Comprehensive Loss			Total Stockholders’ Equity
December 31, 2018		159,721	$	1,597	$	314,907		$	(276,800	)	$	(703	)	$	39,001
Issuance of common stock, net of offering costs		2,307		23		7,758			—			—			7,781
Common stock issued under equity compensation plan, net of shares withheld for taxes		664		7		(1,084	)		—			—			(1,077	)
Exercise of options		512		5		669			—			—			674
Share-based compensation		—		—		4,645			—			—			4,645
Cumulative effect of change in accounting principle		—		—		—			116			—			116
Net loss		—		—		—			(6,722	)		—			(6,722	)
Other comprehensive income loss		—		—		—			—			(3	)		(3	)
September 30, 2019		163,204	$	1,632	$	326,895		$	(283,406	)	$	(706	)	$	44,415

	Common Stock										Accumulated
	Shares		Amount		Additional Paid-In Capital			Accumulated Deficit			Other Comprehensive Loss			Total Stockholders’ Equity
June 30, 2018		157,437	$	1,574	$	304,770		$	(280,998	)	$	(700	)	$	24,646
Common stock issued under equity compensation plan, net of shares withheld for taxes		9		1		(14	)		—			—			(13	)
Exercise of options		75		—		74			—			—			74
Share-based compensation		—		—		1,605			—			—			1,605
Net loss		—		—		—			(1,936	)		—			(1,936	)
Other comprehensive loss		—		—		—						(2	)		(2	)
September 30, 2018		157,521	$	1,575	$	306,435		$	(282,934	)	$	(702	)	$	24,374


	Common Stock										Accumulated
	Shares		Amount		Additional Paid-In Capital			Accumulated Deficit			Other Comprehensive Loss			Total Stockholders’ Equity
December 31, 2017		156,675	$	1,567	$	302,965		$	(270,285	)	$	(700	)	$	33,547
Common stock issued under equity compensation plan, net of shares withheld for taxes		462		4		(547	)		—			—			(543	)
Exercise of options		384		4		362			—			—			366
Share-based compensation		—		—		3,655			—			—			3,655
Net loss		—		—		—			(12,649	)		—			(12,649	)
Other comprehensive loss		—		—		—						(2	)		(2	)
September 30, 2018		157,521	$	1,575	$	306,435		$	(282,934	)	$	(702	)	$	24,374

	Nine Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2019			2018
Cash flows from operating activities:
Net loss	$	(13,028,382	)	$	(19,838,556	)	$	(6,722	)	$	(12,649	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense		2,371,453			1,886,823			4,645			3,655
Depreciation and amortization		1,520,197			1,371,538			1,916			1,808
Loss on disposal of equipment		22,600			17,785
Write-off of capitalized patent costs		45,600			—
Accretion of interest expense		66,406			—
Amortization of debt issuance costs		18,347			—
Amortization of premiums and discounts on investment securities		(16,638	)		10,913
Other								279			193
Changes in operating assets and liabilities:
Accounts receivable		(1,069,614	)		(624,232	)		(14,957	)		(3,606	)
Inventories		(2,615,414	)		(999,158	)		(5,153	)		(2,000	)
Contract assets								1,743			230
Prepaid expenses and other assets		(299,825	)		2,922,527			847			517
Deferred costs		559,939			(762,413	)
Accounts payable		701,704			3,308,607			4,669			1,518
Accrued expenses and other current liabilities		549,929			(146,376	)
Accrued expenses and other liabilities								2,854			2,157
Deferred revenue		(4,308,571	)		1,156,309			394			(1,983	)
Net cash used in operating activities		(15,482,269	)		(11,696,233	)		(9,485	)		(10,160	)
Cash flows from investing activities:
Purchase of investment securities		(9,963,978	)		—
Proceeds from sale of assets								2,500			7,500
Purchases of equipment, molds, furniture and fixtures		(878,855	)		(4,278,643	)		(1,274	)		(526	)
Additions to patent rights		(83,592	)		(103,788	)		—			(40	)
Proceeds from maturities of investment securities		—			12,000,000			—			5,000
Net cash (used in) provided by investing activities		(10,926,425	)		7,617,569
Net cash provided by investing activities								1,226			11,934
Cash flows from financing activities:
Proceeds from issuance of long-term debt		25,000,000			—			15,000			—
Payment of debt issuance costs		(293,538	)		—			(136	)		—
Proceeds from issuance of common stock, net								7,781			—
Proceeds from exercise of stock options		1,670,149			24,071			674			366
Taxes paid related to net share settlement of equity awards		(248,709	)		(64,096	)		(1,077	)		(543	)
Net cash provided by (used in) financing activities		26,127,902			(40,025	)		22,242			(177	)
Effect of exchange rate changes on cash		(307	)		1,440			(1	)		1
Net decrease in cash and cash equivalents		(281,099	)		(4,117,249	)
Net increase in cash and cash equivalents								13,982			1,598
Cash and cash equivalents:
Beginning of period		27,714,588			32,898,676			27,892			26,562
End of period	$	27,433,489		$	28,781,427		$	41,874		$	28,160
Supplemental disclosure of cash flow information:
Cash paid for interest							$	2,073		$	1,752
Supplemental disclosure of non-cash investing activities:
Purchases of equipment, molds, furniture and fixtures recorded in accounts payable and accrued expenses	$	92,674		$	552,556		$	881		$	56
Additions to patent rights recorded in accounts payable and accrued expenses	$	6,160		$	23,369

Antares Pharma, Inc. (“Antares” or the “Company”) is ~~an emerging, specialty pharmaceutical~~a combination drug device company focused primarily on the development and commercialization of self-administered parenteral pharmaceutical products and technologies. The Company develops and ~~manufactures,~~commercializes, for itself or with partners, novel therapeutic products using its advanced drug delivery technology to enhance ~~the~~ existing drug compounds and delivery methods. The Company’s intramuscular and subcutaneous injection technology platforms include the VIBEX^® and VIBEX^® QuickShot^®pressure-assisted auto injector ~~system~~systems suitable for branded and generic injectable drugs in unit dose containers ~~reusable needle-free spring-action injector devices,~~ and disposable multi-dose pen ~~injectors for use with standard cartridges.~~injectors. The Company has a portfolio of proprietary and partnered ~~products, including approved~~ commercial products and ~~several partnered~~ongoing product ~~candidates~~development programs in ~~advanced~~various stages of ~~development and under active review by the U.S. Food and Drug Administration (“FDA”).~~development. The Company has formed significant strategic alliances with Teva Pharmaceutical Industries, Ltd. (“Teva”), AMAG Pharmaceuticals, Inc. (“AMAG”)~~, Ferring Pharmaceuticals~~ and Pfizer Inc. ~~and Ferring B.V. (together “Ferring”~~(“Pfizer”)~~, and has multiple ongoing internal and partnered product development programs.~~.

The Company markets and sells its proprietary product XYOSTED^® (testosterone enanthate) injection in the U.S., which is indicated for testosterone replacement therapy in adult males for conditions associated with a deficiency or absence of endogenous testosterone. XYOSTED^® was approved by the U.S. Food and Drug Administration (“FDA”) on September 28, 2018 and launched for commercial sale in November 2018.

The Company also markets and sells its proprietary product OTREXUP^® (methotrexate) injection in the U.S., which ~~was launched in February 2014. OTREXUP~~^®~~is the first subcutaneous methotrexate for once weekly self-administration with an easy-to-use, single dose, disposable auto injector approved by the FDA. OTREXUP~~^®is indicated for adults with severe active rheumatoid arthritis, ~~(“RA”),~~ children with active polyarticular juvenile idiopathic arthritis and adults with severe recalcitrant psoriasis.

~~The Company, with~~Through its commercialization partner Teva, ~~launched~~the Company sells Sumatriptan Injection USP, indicated in the U.S. for the acute treatment of migraine and cluster headache in ~~adults, in June 2016.~~ adults.

In ~~December 2015,~~collaboration with AMAG, the Company ~~received FDA approval~~developed a subcutaneous auto injector for ~~an Abbreviated New Drug Application (“ANDA”) for 4 mg/0.5 mL and 6 mg/0.5 mL single-dose prefilled syringe auto-injectors, a generic equivalent to Imitrex~~use with AMAG’s progestin hormone drug Makena^® ~~STATdose Pen~~(hydroxyprogesterone caproate injection) under an exclusive license and development agreement. The Makena^®~~. Sumatriptan~~ subcutaneous auto injector drug-device combination product, which is a ready-to-administer treatment indicated to reduce the risk of preterm birth in women pregnant with one baby and who spontaneously delivered at least one preterm baby in the past, was approved by the FDA in February 2018 and launched for commercial sale by AMAG in the first quarter of 2018. The Company is the exclusive supplier of the devices and final assembled and packaged commercial product to AMAG.

Through a license, development and supply agreement with Teva, Antares developed and is the exclusive supplier of the device for Teva’s Epinephrine Injection USP, ~~represents~~which is indicated for emergency treatment of severe allergic reactions in adults and certain pediatric patients. The product was approved by the ~~Company’s first ANDA approval~~FDA in August 2018 and launched for commercial sale in late fourth quarter of ~~a complex generic and second product approved using the VIBEX~~^® ~~auto injector platform.~~ 2018.

The Company is also developing ~~XYOSTED~~^TM ~~(testosterone enanthate) injection for testosterone replacement therapy,~~two multi-dose pen injector products in collaboration with Teva, a combination drug device rescue pen in collaboration with Pfizer, and ~~submitted a 505 (b) (2) New Drug Application (“NDA”) to the FDA in December 2016. On October 20, 2017, the Company received a Complete Response Letter (the “CRL”) from the FDA for XYOSTED~~^TM~~, which identified two deficiencies~~has other ongoing internal research and ~~indicated that the NDA cannot be approved in its present form. The Company is assessing the content of the CRL, including the information that may be needed to address the deficiencies.~~development programs.

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the U.S. for interim financial information and with the instructions to Form 10-Q and Article 10 of the Securities and Exchange Commission's Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the U.S. for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The accompanying consolidated financial statements and notes thereto should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2018. Operating results for the three and nine months ended September 30, ~~2017~~2019 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2017.~~2019.

During the preparation of the consolidated financial statements for the year ended December 31, 2018, management revised the presentation of certain regulatory fees between research and development expenses and selling, general and administrative expenses. As a result, the Company also made revisions to its prior period interim consolidated statements of operations as follows:

These revisions had no impact on the Company’s total operating expenses or net loss. The revisions also had no impact on the consolidated balance sheets or the consolidated statements of comprehensive income (loss), stockholders’ equity or cash flows. Management evaluated the materiality of the revisions from a quantitative and qualitative perspective and concluded that the revisions are immaterial to the consolidated financial statements.

The ~~primary objectives~~Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2016-02 Leases (“Topic 842”) effective January 1, 2019, electing the package of practical expedients and applying the transition provisions as of the ~~Company’s investment policy~~effective date. Reporting periods beginning on or after January 1, 2019 are ~~to protect principal, maintain adequate liquidity and maximize returns. The Company’s investments consist of U.S. Treasury bills and government agency notes that are classified~~presented under Topic 842, while prior period amounts, as held-to-maturity because the Company has the intent and ability to hold the securities to maturity. Investments with maturities of one year or less are classified as short-term. The securities are carried at their amortized cost and the fair value is determined by quoted market prices. At September 30, 2017, the Company’s investments had a carrying value of $9,976,984, which approximated fair value. The Company held no investments asreported under previous GAAP, were not adjusted. As of December 31, ~~2016.~~ 2018, the Company had non-cancellable operating leases for its corporate headquarters facility in Ewing, New Jersey, and its office, research and development facility in Plymouth, Minnesota, a suburb of Minneapolis, which were not required to be recorded on the balance sheet. As a result of the adoption of Topic 842, the Company recognized approximately $1.0 million in right-of-use assets and lease liabilities in connection with its existing operating leases. The adoption of Topic 842 on January 1, 2019 did not have a significant impact on the Company’s consolidated results of operations or cash flows.

In 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. The amendment in this update replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses on instruments within its scope, including trade receivables. This standard requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts, and is intended to provide financial statement users with more decision-useful information about the expected credit losses. This ASU is effective for annual periods and interim periods for those annual periods beginning after December 15, 2019. The Company has historically had little to no credit losses on financial instruments and is currently evaluating the impact the adoption of ASU 2016-13 will have on its consolidated financial statements.

In 2018, the FASB issued new guidance on a customer's accounting for implementation, set-up, and other upfront costs incurred in a cloud computing arrangement that is hosted by the vendor (i.e., a service contract). Under the new guidance, customers will apply the same criteria for capitalizing implementation costs as they would for an arrangement that has a software license. This standard will be effective for annual reporting periods beginning after December 15, 2019, including interim reporting periods within those fiscal years. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements.

In 2018, the FASB issued new guidance to clarify the interaction between Collaborative Arrangements and Revenue from Contracts with Customers standards. The guidance clarifies that certain transactions between collaborative arrangement participants should be accounted for under revenue guidance, adds unit of account guidance to the collaborative arrangement guidance to align with the revenue standard, and clarifies presentation guidance for transactions with a collaborative arrangement participant that is not accounted for under the revenue standard. The guidance is effective for annual reporting

periods beginning after December 15, 2019, including interim reporting periods within those annual reporting periods. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements.

Inventories are stated at the lower of cost or net realizable value. Cost is determined on a first-in, first-out basis. Certain components of the Company’s products are provided by a limited number of vendors, and the Company’s production, assembly,

warehousing and distribution operations are outsourced to third-parties where substantially all of the Company’s inventory is located. Disruption of supply from key vendors or third-party suppliers may have a material adverse impact on the Company’s operations. The Company provides a reserve for potentially excess, dated or obsolete inventories based on an analysis of inventory on hand compared to forecasts of future sales, which was ~~$1,000,000~~$1,074, and ~~$900,000~~$847 at September 30, ~~2017~~2019 and December 31, ~~2016,~~2018, respectively. Inventories consist of the following:

	September 30,		December 31,		September 30,		December 31,
	2017		2016		2019		2018
Inventories:
Raw material	$	126,070	$	142,491	$	325	$	26
Work in process		4,357,554		2,429,075		8,467		7,622
Finished goods		3,458,752		2,755,396		7,711		3,702
	$	7,942,376	$	5,326,962	$	16,503	$	11,350

~~The Company began detailing OTREXUP~~^® ~~to health care professionals in February 2014. OTREXUP~~^® is sold in packages of four pre-filled, single-dose disposable auto injectors to wholesale pharmaceutical distributors, its customers, subject to rights of return within a period beginning six months prior to,Equipment, molds, furniture, and ~~ending 12 months following, product expiration.~~

~~Prior to the first quarter of 2017, the Company could not reliably estimate expected returns of OTREXUP~~^®fixtures are stated at the time of shipment given its limited sales history of the product. Accordingly, the recognition of revenue was deferred on product shipments until the rights of return no longer existed, which occurred at the earlier of the time OTREXUP^® ~~units were dispensed through patient prescriptions or expiration of the right of return of the product. Patient prescriptions dispensed were estimated using third-party market prescription data.~~

~~In the first quarter of 2017, the Company determined it had developed sufficient historical information to reasonably estimate future returns of OTREXUP~~^®~~and began recognizing revenue,~~cost, net of accumulated depreciation, and are depreciated using the straight-line method over their estimated ~~returns, upon delivery~~useful lives ranging from three to ~~the distributors.~~ten years. As ~~a result, the Company recognized an additional $1,297,054 for product shipped to distributors in previous periods that was not previously recognized as revenue at the time~~ of shipment, net of the returns allowance established in the first quarter of 2017. The Company also recognized $254,425 of related product costs that had been previously deferred. The net impact of these changes resulted in a decrease in net loss of $1,042,629, less than $0.01 per share, for the nine months ended September 30, ~~2017.~~

~~Product sales revenue for OTREXUP~~^®2019 and December 31, 2018, the Company’s equipment, molds, furniture and fixtures totaled $15,409 and $14,895, respectively, which is presented net of ~~estimated returns~~accumulated depreciation of $9,163 and ~~product sales allowances for wholesaler discounts, prompt pay discounts, chargebacks, rebates and patient discount programs. The estimated product returns reserve was $650,000~~$7,570 as of September 30, ~~2017~~2019 and ~~zero at~~ December 31, ~~2016. Product sales allowances were $1,986,553 as of September 30, 2017 and $1,540,488 as of December 31, 2016.~~2018, respectively.

The Company recognizes right-of-use (“ROU”) assets and lease liabilities when it obtains the right to control an asset under a leasing arrangement with an initial term greater than twelve months. The Company evaluates the nature of each lease at the inception of an arrangement to determine whether it is an operating or financing lease and recognizes the right-of-use asset and lease liabilities based on the present value of future minimum lease payments over the expected lease term. The Company’s leases do not generally contain an implicit interest rate and therefore the Company uses the incremental borrowing rate it would expect to pay to borrow on a similar collateralized basis over a similar term in order to determine the present value of its lease payments. Certain of the Company’s lease arrangements contain renewal options that have not been included in the determination of the lease term, as they are not reasonably certain of exercise. For contracts that contain lease and non-lease components, the Company accounts for both components as a single lease component. Variable lease payments are expensed as incurred.

The Company generates revenue from proprietary and partnered product sales, ~~allowances~~license and development activities and royalty arrangements. Revenue is recognized when or as the Company transfers control of the promised goods or services to its customers at the transaction price, which is the amount that reflects the consideration to which it expects to be entitled to in exchange for those goods or services.

At inception of each contract, the Company identifies the goods and services that have been promised to the customer and each of those that represent a ~~reduction of product sales~~distinct performance obligation, determines the transaction price including any variable consideration, allocates the transaction price to the distinct performance obligations and determines whether control transfers to the customer at a point in time or over time. Variable consideration is included in the ~~same period~~transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Company reassesses its reserves for variable consideration at each

reporting date and makes adjustments, if necessary, which may affect revenue and earnings in periods in which any such changes become known.

The Company has elected to recognize the cost for freight and shipping activities as fulfilment cost. Amounts billed to customers for shipping and handling are included as part of the transaction price and recognized as revenue when control of underlying goods are transferred to the customer. The related ~~revenue~~shipping and freight charges incurred by the Company are included in cost of revenue.

The Company sells its proprietary products XYOSTED^® and OTREXUP^® primarily to wholesale and specialty distributors. Revenue is ~~recognized. Product~~recognized when control has transferred to the customer, which is typically upon delivery, at the net selling price, which reflects the variable consideration for which reserves and sales allowances are established for estimated returns, wholesale distribution fees, prompt payment discounts, government rebates and chargebacks, plan rebate arrangements and patient discount and support programs.

The determination of certain of these reserves and sales allowances require management to make a number of judgements and estimates to reflect the Company’s best estimate of the transaction price and the amount of consideration to which it believes it is ultimately entitled to receive. The expected value is determined based on ~~amounts owed or to be claimed on the related sales. These estimates take into consideration the~~unit sales data, contractual terms ~~of our agreements~~ with customers and third-party ~~payors~~payers, historical and expected utilization rates, any new or anticipated changes in programs or regulations that would impact the levels of inventory within the distribution channels that may result in future rebates or discounts taken. In certain cases, such as patient support programs, the Company recognizes the cost of patient discounts as a reduction of revenue based on estimated utilization. If actual future results vary, it may be necessary to adjust these estimates, which could have an effect on product revenue in the period of adjustment. Product sales allowances include:

~~Wholesaler Distribution Fees~~. Distribution fees are paid to certain wholesale distributors based on contractually determined rates. The Company accrues the fee on shipment to the respective wholesale distributors and recognizes the fee as a reduction of revenue in the same period the related revenue is recognized.

~~Prompt Pay Discounts. The Company offers cash discounts to its customers, generally 2%~~amount of the ~~sales price, as an incentive for prompt payment. The Company accounts for cash discounts by reducing accounts receivable by the prompt pay discount amount~~actual rebates, customer purchasing patterns, product expiration dates and ~~recognizes the discount as a reduction of revenue in the same period the related revenue is recognized.~~

~~Chargebacks~~. The Company provides discounts to authorized users of the Federal Supply Schedule (“FSS”) of the General Services Administration under an FSS contract negotiated by the Department of Veterans Affairs and various organizations under Medicaid contracts and regulations. These entities purchase products from the wholesale distributors at a discounted price, and the wholesale distributors then charge back to the Company the difference between the current wholesale

acquisition cost and the price the entity paid for the product. The Company estimates and accrues chargebacks based on estimated wholesaler inventory levels, current contract prices and historical chargeback activity. Chargebacks are recognized as a reduction of revenue in the same period the related revenue is recognized.

~~Rebates~~. The Company participates in certain rebate programs, which provide discounted prescriptions to qualified insured patients. Under these rebate programs, the Company will pay a rebate to the third-party administrator of the program, generally two to three months after the quarter in which prescriptions subject to the rebate are filled. The Company estimates and accrues for these rebates based on current contract prices, historical and estimated percentages of product sold to qualified patients. Rebates are recognized as a reduction of revenue in the same period the related revenue is recognized.

~~Patient Discount Programs. The Company offers discount card programs to patients for OTREXUP~~^® in which patients receive discounts on their prescriptions that are reimbursed by the Company. The Company estimates the total amount that will be redeemed based on historical redemption experience and on estimated levels of inventory in the distribution ~~and retail channels and recognizes the discount~~channel. Reserves for prompt payment discounts are recorded as a reduction ~~of revenue~~in accounts receivable. Reserves for returns, rebates and chargebacks, distributor fees and customer co-pay support programs are included within current liabilities in the ~~same period the related revenue~~consolidated balance sheets.

~~Under a~~party to several license, development, supply and distribution ~~agreement~~arrangements with ~~Teva for an auto-injector product containing sumatriptan,~~pharmaceutical partners, under which the Company produces and is the exclusive supplier of certain products, devices ~~and assembles product for shipment to Teva, and Teva~~and/or components. Revenue is ~~responsible for commercial distribution and sale~~recognized when or as control of the ~~product.~~ goods transfers to the customer as follows:

The Company is ~~compensated,~~the exclusive supplier of the Makena^® subcutaneous auto injector product to AMAG. Because the product is custom manufactured for AMAG with no alternative use and ~~recognizes~~the Company has a contractual right to payment for performance completed to date, control is continuously transferred to the customer as product is produced pursuant to firm purchase orders. Revenue is recognized over time using the output method based on the contractual selling price and number of units produced. The amount of revenue recognized in excess of the amount shipped/billed to the customer, if any, is recorded as contract assets due to the short-term nature in which the amount is ultimately expected to be billed and collected from the customer.

All other partnered product sales are recognized at the point in time in which control is transferred to the customer, which is typically upon shipment. Sales terms and pricing are governed by the respective supply and distribution agreements, and there is generally no price protection or right of return. Revenue is recognized at the transaction price, which includes the contractual per unit selling price and estimated variable consideration, if any. For example, the Company sells Sumatriptan Injection USP to Teva at cost ~~for shipments of product delivered to Teva. The Company~~and is ~~also~~ entitled to receive 50 percent of the net profits from commercial sales made by Teva, payable to the Company within 45 days after the end of the quarter in which the commercial sales are ~~made by~~made. The Company recognizes revenue, including the estimated variable consideration it expects to receive for contract margin on future commercial sales, upon shipment of the goods to Teva. The estimated variable consideration is recognized at an amount the Company believes is not subject to significant reversal based on historical experience, and is adjusted at each reporting period if the most likely amount of expected consideration changes or becomes fixed.

The Company has entered into several license, development and supply arrangements with pharmaceutical partners under which the Company grants a license to its device technology and know-how and provides research and development services that often involve multiple performance obligations and highly customized deliverables. For such arrangements, the Company identifies each of the promised goods and services within the contract and the distinct performance obligations at inception, and allocates

consideration to each performance obligation based on relative standalone selling price, which is generally determined based on the expected cost plus margin.

If the contract includes an enforceable right to payment for ~~commercial sale in June 2016. Initially,~~performance completed to date and performance obligations are satisfied over time, the Company recognized revenue over the development period using either the input or output method depending on which is most appropriate given the ~~limited access~~nature of the distinct deliverable. For other contracts that do not contain an enforceable right to ~~sales data~~payment for performance completed to date, revenue is recognized when control is transferred to the customer. Factors that may indicate that the transfer of control has occurred include the transfer of legal title, transfer of physical possession, the customer has obtained the significant risks and rewards of ownership of the assets and the ~~45-day lag in reporting~~Company has a present right to payment.

The Company’s typical payment terms for development contracts may include an upfront payment equal to a percentage of the ~~profit split~~total contract value with the remaining portion to be billed upon completion and transfer of the individual deliverables or satisfaction of the individual performance obligations. The Company records a liability for cash received in advance of performance, which is presented within deferred revenue on the consolidated balance sheet and recognized as revenue when the associated performance obligations have been satisfied. The Company recognized $575 in licensing and development revenue in connection with contract liabilities that were outstanding as of December 31, 2018 and satisfied during the nine months ended September 30, 2019.

License fees and milestones received in exchange for the grant of a license to the Company’s functional intellectual property such as patented technology and know-how in connection with a partnered development arrangement are generally recognized at inception of the arrangement, or over the development period depending on the facts and circumstances, as the license is not generally distinct from ~~Teva, management was~~the non-licensed goods or services to be provided under the contract. Milestone payments that are contingent upon the occurrence of future events, are evaluated and recorded at the most likely amount, and to the extent that it is probable that a significant reversal will not ~~able to estimate~~occur when the ~~profit margin the~~associated uncertainty is resolved.

The Company ~~expected to receive from~~earns royalties in connection with licenses granted under license and development arrangements with partners. Royalties are based upon a percentage of commercial sales ~~made by Teva at~~of partnered products with rates ranging from mid-single digit to low double digit and are tiered based on levels of net sales. These sales-based royalties, for which the ~~time of sale. Accordingly, prior~~license was deemed the predominant element to which the ~~third quarter of 2017, revenue from the profit sharing arrangement was~~royalties relate, are estimated and recognized in the period ~~following~~in which the partners’ commercial sales occur. The royalties are generally reported and payable to the Company within 45 to 60 days of the end of the period in which the commercial sales ~~by Teva~~are made. The Company bases its estimates of royalties earned on actual sales information from its partners when available or estimated prescription sales from external sources and estimated net selling price. If actual royalties received are different than amounts ~~were reported and paid to~~estimated, the ~~Company. Beginning~~Company would adjust the royalty revenue in the ~~third quarter~~period in which the adjustment becomes known.

Remaining performance obligations represents the allocation of ~~2017, management determined it had developed sufficient history~~transaction price of firm orders and ~~is now able~~development contract deliverables for which work has not been completed or orders fulfilled, and excludes potential purchase orders under ordering-type supply contracts with indefinite delivery or quantity. As of September 30, 2019, the aggregate value of remaining performance obligations, excluding contracts with an original expected length of one year or less, was $9.1 million. The Company expects to ~~obtain additional sales information in order to reasonably estimate and~~ recognize revenue ~~from~~on the ~~profit sharing arrangement when product is sold by Teva.~~remaining performance obligations over the next three years.

As of January 1, 2019, the Company had operating leases for its corporate headquarters in Ewing, New Jersey and its research and development facilities in Plymouth, Minnesota. In connection with the adoption of Topic 842 on January 1, 2019, the Company recognized approximately $1.0 million in right-of-use assets and lease liabilities. During the first quarter of 2019, the Company also entered into a master operating lease arrangement for a fleet of vehicles for use by its sales force.

In May 2019, the Company amended its existing lease of the Company’s corporate headquarters to extend the lease term for an additional two years. The lease extension period commences on November 1, 2019 and expires on October 31, 2021.

On July 1, 2019, the Company entered into a new operating lease for approximately 75,000 square feet of office, laboratory, manufacturing and warehousing space in Minnetonka, Minnesota. The initial lease term is 12.5 years and the Company may renew the lease, at its option, for one additional renewal period of three years. The landlord delivered possession of the premises

to the Company on July 1, 2019 and payment of rent will commence on January 1, 2020. The lease provides for the payment of fixed base rent and additional rent for operating expenses, insurance premiums and taxes. The Company is performing the build-out of the premises at the Company’s cost with an allowance for tenant improvement to be reimbursed by the landlord up to $1.2 million.

Operating lease costs were $520 and $1,025 for the three and nine months ended September 30, 2019, respectively. Cash paid for amounts included in the measurement of operating lease liabilities was $337 and $1,053 for the three and nine months ended September 30, 2019. During the nine months ended September 30, 2019, operating lease ROU assets obtained in exchange for operating lease obligations were $5,208. As of September 30, 2019, the weighted average discount rate was approximately 9% and the weighted average remaining lease term was 7.8 years.

The following table summarizes the Company’s operating lease maturities as of September 30, 2019:

Under the prior leasing standard, future minimum payments under non-cancellable operating leases as of December 31, 2018 were as follows:

OnIn June 6, 2017, the Company entered into a loan and security agreement (the “Loan Agreement”) with Hercules Capital, Inc., for a term loan of up to ~~$35,000,000~~$35.0 million (the “Term Loan”), under which the ~~proceeds~~Company initially borrowed $25.0 million (“Tranche I”.) The amortizing Term Loan is secured by substantially all of ~~which are~~the Company’s assets, excluding intellectual property, accrues interest at a prime-based variable rate with a maximum of 9.5%, provided for payments of interest-only until August 1, 2019 and matures on July 1, 2022.

On June 26, 2019, the Company entered into a First Amendment (the “Amendment”) to ~~be used for working capital and general corporate purposes. The first advance of $25,000,000 was funded upon execution of~~ the Loan Agreement, ~~on June 6, 2017. Under~~which increased the ~~terms~~aggregate principal amount available under the Term Loan from $35.0 million to $50.0 million. Upon signing of the ~~Loan Agreement,~~Amendment, an additional $15.0 million (“Tranche II”) was funded to the Company. The Company may, but is not obligated to, request one or more additional advances of at least ~~$5,000,000~~$5.0 million, not to exceed ~~$10,000,000~~$10.0 million in the aggregate ~~subject to the Company achieving certain corporate milestones and satisfying customary conditions.~~(“Tranche III”). The ~~Company must exercise its~~Company’s option to request additional advances ~~prior~~is available between January 1, 2020 and September 15, 2020. The Amendment extended the interest-only payment period of the Term Loan to ~~September 30, 2018.~~

August 1, 2021, which may be further extended to August 1, 2022 if the Company achieves a certain loan extension milestone. The Term Loan ~~is secured by substantially all of the Company’s assets, excluding intellectual property, and will mature on~~maturity date remains July 1, 2022. The Term Loan accrues interest at a calculated prime-based variable rate with a maximum interest rate of 9.50%. As of September 30, 2017, the interest rate was 8.75%. Payments under the Loan Agreement are interest only until the first principal payment is due on August 1, 2019, provided that the interest only period2022, but may be extended to ~~February~~July 1, ~~2020 if the~~2024 contingent upon satisfaction of a certain loan extension milestone.

The Company ~~achieves certain corporate milestones. The Loan Agreement also requires the Company~~is required to pay aan end of term fee ~~equal to 4.25% of the total original principal amount of all term loan advances~~ (“End of Term Charge”)~~, which is due~~ equal to 4.25% of Tranche I and 3.95% of the borrowings under Tranche II and Tranche III, payable upon the earlier of July 1, 2022 or repayment of the ~~Term Loan at either maturity or earlier repayment, and imposes a prepayment fee of 1.0% to 3.0% if any or all of the balance is prepaid prior to the maturity date.~~loan.

As of September 30, ~~2017,~~2019 and December 31, 2018, the carrying value of the Term Loan was ~~$24,791,214,~~$40,269 and $25,126, respectively, which consisted of the ~~$25,000,000~~ principal ~~balance~~amounts outstanding and the End of Term Charge accrual, ~~of $66,406,~~ less unamortized debt issuance costs ~~of $275,192. The Company incurred debt issuance costs~~ that ~~along with the End of Term Charge,~~ are being amortized/accrued to interest expense over the term of the Term Loan using the effective interest method.

Future principal payments under the ~~term loan, including~~Term Loan, excluding the contractual End of Term ~~Charge,~~Charges, are ~~as follows:~~due in the following periods:

	September 30,
	2017
2017	$	—
2018		—
2019		3,075,781	$	—
2020		7,870,277		—
2021		8,602,959		16,179
Thereafter		6,513,483
2022				23,821
	$	26,062,500	$	40,000

~~The Company believes that the carrying value of the Term Loan approximates its fair value based on the borrowing rates currently available for loans with similar terms.~~

OnIn August ~~11,~~ 2017, the Company entered into a sales agreement (the “Sales Agreement”) with Cowen and Company, LLC (“Cowen”) under which the Company ~~may~~could offer and sell, from time to time and at its sole discretion, shares of its common stock having an aggregate offering price of up to ~~$30,000,000~~$30.0 million through Cowen as the Company’s sales agent and/or as ~~principal~~.principal. Cowen ~~may~~was permitted to sell the common stock bythrough any method ~~permitted by law~~ deemed ~~to be~~ an “at the market offering” as defined in Rule 415 of the Securities Act of 1933, as ~~amended. The~~amended (the “ATM Facility”).

On June 26, 2019, the Company ~~will pay~~delivered written notice to Cowen ~~a commission of 3.0% of~~that it was terminating its Sales Agreement effective July 6, 2019, and accordingly the ~~gross sales proceeds of any common stock~~ATM Facility is no longer available for use. During the nine months ended September 30, 2019, the Company sold ~~through Cowen under the Sales Agreement. The Company is not obligated to make any sales~~2.3 million shares of common stock under the ~~Sales Agreement and no sales~~ATM Facility. The sale of common stock ~~were made pursuant~~resulted in aggregate gross proceeds of $8.1 million, less sales commission and payment of offering costs, resulting in net offering proceeds to the ~~Sales Agreement in the period ended September 30, 2017.~~

The ~~Company’s 2008~~Company has an Equity Compensation Plan (the “Plan”), which was amended and restated pursuant to stockholder approval on June 13, 2019 in order to increase the number of shares available for issuance under the Plan, extend the term of the Plan and modify certain provisions. The Plan allows for grants in the form of incentive stock options, nonqualified stock options, stock units, stock awards, stock appreciation rights, and other stock-based awards. All of the Company’s officers, directors, employees, consultants and advisors are eligible to receive grants under the Plan. The maximum number of shares authorized for issuance under the ~~amended and restated~~ Plan is ~~32,200,000~~40.2 million and the maximum number of shares of stock that may be granted to any one employee for qualified performance-based compensation during a calendar year is ~~4,000,000~~four million shares. Options to purchase shares of common stock are granted at exercise prices not less than 100% of fair market value on the dates of grant. The term of each option is ten years and the options typically vest ~~in quarterly installments~~ over a three-year period with a minimum vesting period of one year. As of September 30, ~~2017,~~2019, the Plan had approximately ~~6,400,000~~7.5 million shares available for grant. Stock option exercises are satisfied through the issuance of new shares.

~~Stock Options~~The Company’s Board of Directors (the “Board”) has also approved a long-term incentive program (“LTIP”), pursuant to which the Company’s senior executives have been awarded stock options, restricted stock units (“RSUs”) and performance stock units (“PSUs”) with targeted values based on values granted to similarly situated senior executives in the Company’s peer group. The stock options have a ten-year term, have an exercise price equal to the closing price of the Company’s common stock on the date of grant, vest in annual installments over three years, and are granted on the same standard terms and conditions as other stock options granted pursuant to the Plan. The RSU awards made to senior executives vest and convert into shares of the Company’s stock in three equal annual installments. The PSU awards vest and convert into shares of the Company’s common stock based on the Company’s attainment of certain performance goals as established by the Board over a performance period, which is typically three years. A portion of the compensation provided to non-employee members of the Board is awarded in the form of stock options and RSUs, which vest in full one year from the date of grant and are otherwise granted on the same standard terms and conditions as other awards granted under the Plan.

The following is a summary of stock option activity under the Plan as of and for the nine months ended September 30, ~~2017:~~ 2019:

						Weighted									Weighted
				Weighted		Average							Weighted		Average
				Average		Remaining		Aggregate					Average		Remaining		Aggregate
	Number of			Exercise		Contractual		Intrinsic		Number of			Exercise		Contractual		Intrinsic
	Shares			Price		Term (Years)		Value		Shares			Price		Term (Years)		Value
Outstanding at December 31, 2016		11,313,909		$	1.84
Outstanding at December 31, 2018											14,079		$	2.19
Granted		2,975,667			2.67						2,380			2.93
Exercised		(1,062,693	)		1.57						(512	)		1.32
Cancelled/Forfeited		(833,033	)		2.68						(110	)		2.16
Outstanding at September 30, 2017		12,393,850			2.01		7.3	$	15,631,780
Exercisable at September 30, 2017		8,043,282		$	1.93		6.2	$	10,880,581
Outstanding at September 30, 2019											15,837			2.33		6.5	$	16,472
Exercisable at September 30, 2019											11,736		$	2.15		5.5	$	14,368

The weighted average grant date fair value per share ~~weighted average fair values of all~~for options granted during the nine months ended September 30, ~~2017~~2019 and ~~2016 were~~2018 was $1.50 and $1.44, respectively, which was estimated ~~as $1.62 and $0.54, respectively, on the date of grant~~ using the Black-Scholes option pricing model based on the assumptions noted in the table below. Expected volatilities are based on the historical volatility of the Company’s stock price. The weighted average expected life is based on both historical and anticipated employee behavior.

	September 30,				September 30,
	2017		2016		2019		2018
Risk-free interest rate		1.8%		1.3%	1.9%		2.8%
Annualized volatility		53.4%		51.6%	55.8%		53.7%
Weighted average expected life, in years		6.0		6.0		5.5		6.0
Expected dividend yield		0.0%		0.0%	0.0%		0.0%

~~During~~The following is a summary of PSU and RSU award activity under the ~~nine months ended September 30, 2017, stock option exercises resulted in cash proceeds to the Company~~Plan as of ~~$1,670,149~~ and the issuance of 1,062,693 shares of common stock. Stock option exercises resulted in proceeds of $24,071 and the issuance of 21,492 shares of common stock in the nine months ended September 30, 2016.

~~The Company recognized $1,680,437 and $1,572,710 of compensation expense related to stock options~~ for the nine months ended September 30, 2017 and 2016, respectively, and $692,834 and $505,663 for the three months ended September 30, 2017 and 2016, respectively. As of September 30, 2017, there was approximately $4,500,000 of total unrecognized compensation cost related to non-vested outstanding stock options that is expected to be recognized over a weighted average period of approximately 2.1 years.

The Company’s Board of Directors has approved a long term incentive program (“LTIP”) for the benefit of the Company’s senior executives. Pursuant to the LTIP, the Company’s senior executives have been awarded stock options, restricted stock units (“RSU”) and performance stock units (“PSU”) with targeted values based on values granted to similarly situated senior executives in the Company’s peer group.

The stock options have a ten-year term, have an exercise price equal to the closing price of the Company’s common stock on the date of grant, vest in quarterly installments over three years, were otherwise granted on the same standard terms and conditions as other stock options granted pursuant to the Plan and are included in the stock options table above. The RSUs vest in three equal annual installments. The PSU awards made to the senior executives vest and convert into shares of the Company’s common stock based on the Company’s attainment of certain performance goals as established by the Company’s Board of Directors over a performance period, which is typically three to five years.

~~The performance stock unit awards and restricted stock unit awards granted under the long-term incentive program are summarized in the following table:~~2019:

	Performance Stock Units					Restricted Stock Units					Performance Stock Units					Restricted Stock Units
	Number of Shares			Weighted Average Grant Date Fair Value		Number of Shares			Weighted Average Grant Date Fair Value		Number of Shares			Weighted Average Grant Date Fair Value		Number of Shares			Weighted Average Grant Date Fair Value
Outstanding at December 31, 2016		1,347,289		$	1.50		822,658		$	1.39
Outstanding at December 31, 2018												1,842		$	2.41		1,226		$	2.44
Granted		689,180			3.12		689,180			2.69		593			2.99		789			2.92
Vested/settled		—					(287,508	)		1.49		(415	)		1.18		(614	)		2.19
Forfeited/expired		(502,308	)		2.16		(67,464	)		1.70		(178	)		1.12		—			—
Outstanding at September 30, 2017		1,534,161		$	2.20		1,156,866		$	2.12
Outstanding at September 30, 2019												1,842		$	3.01		1,401		$	2.82

~~In 2017, 2016 and 2015,~~The PSUs granted to senior executives under the LTIP ~~awards include PSUs that~~ may be earned based onupon the Company’s achievement of certain corporate development goals, net revenue goals and total shareholder return (“TSR”) relative to the Nasdaq Biotechnology Index ~~(“NBI”) at the end of~~over the performance ~~period. The performance~~ period, which is ~~January 1, 2015 to December 31, 2017 for the 2015 award, January 1, 2016 to December 31, 2018 for the 2016 award and January 1, 2017 to December 31, 2019 for the 2017 award.~~generally a three-year period. Depending on the outcome of the performance ~~goal,~~goals, a recipient may ultimately earn a number of shares greater or less than ~~their~~the target number of shares granted, ranging from 0% to 150% ~~of the PSUs granted.~~. The fair ~~values~~value of the TSR PSUs ~~granted was~~are expensed over the performance period and determined using a Monte Carlo ~~simulation and utilized the following inputs and assumptions:~~

simulation. The performance period starting price is measured as the average closing price over the last 20 trading days prior to the performance period start. The Monte Carlo simulation model also assumed correlations of returns of the prices of the Company’s common stock and the common stocks of the NBI companies and stock price volatilities of the NBI companies. Thegrant date fair value of ~~the target number of shares~~PSUs that ~~can be earned under the TSR PSUs is being recognized as compensation expense~~are not tied to market-based performance are expensed over the remaining performance ~~period.~~period when it becomes probable that the related goal will be achieved.

~~In connection with PSU~~The LTIP awards ~~the Company recognized compensation expense of $239,995 and $11,331 for~~that vested during the nine months ended September 30, ~~2017~~2019 and ~~2016, respectively. Compensation expense recognized in connection with RSU awards was $451,021 and $302,782 for the nine months ended September 30, 2017 and 2016, respectively.~~

~~Shares issued in connection with LTIP awards that vested in the nine months ended September 30, 2017 and 2016~~2018 were net-share settled such that the Company withheld shares with a value equivalent to the employees’ ~~minimum statutory obligation~~tax obligations for ~~the~~ applicable income and other employment taxes, and remitted ~~the~~ cash to the appropriate taxing authorities. The ~~total~~Company withheld 365 and 211 shares ~~withheld to satisfy tax obligations were 97,586 and 65,575 in~~during the nine months ended September 30, ~~2017~~2019 and ~~2016,~~2018, respectively, ~~and were~~to satisfy tax obligations, which was determined based on the fair value of the shares on their vesting date ~~as determined by~~equal to the Company’s closing stock ~~price. Total payments for the employees’ tax obligations to the taxing authorities were $248,709~~price on such date. The Company paid $1,077 and ~~$64,096 in~~$543 during the nine months ended September 30, ~~2017~~2019 and ~~2016,~~2018, respectively, ~~and are~~to taxing authorities for the employees’ tax obligations, which is reflected as a cash outflow from financing ~~activity~~activities within the consolidated statements of

cash flows. ~~These net-share~~Net-share settlements ~~had~~have the effect of share repurchases by the Company as they ~~reduced~~reduce the number of shares that would have otherwise been issued as a result of the ~~vesting~~vesting.

In connection with Plan awards, the Company recognized share-based compensation expense for the three and ~~did not represent an expense to the Company.~~nine months ended September 30, 2019 and 2018 as follows:

The following table presents the Company’s revenue on a disaggregated basis by types of goods and services and major product lines:

	Three Months Ended				Nine Months Ended				Three Months Ended				Nine Months Ended
	September 30,				September 30,				September 30,				September 30,
	2017		2016		2017		2016		2019		2018		2019		2018
United States of America	$	14,174,112	$	12,036,590	$	37,009,301	$	33,631,332	$	33,684	$	16,027	$	82,411	$	39,448
Europe		750,470		1,215,218		3,018,099		3,829,809		566		1,830		3,444		5,044
Other		127,815		226,955		448,615		564,784		56		11		170		241
	$	15,052,397	$	13,478,763	$	40,476,015	$	38,025,925	$	34,306	$	17,868	$	86,025	$	44,733

~~Significant~~The following table identifies customers from which the Company derived 10% or more of its total revenue in any of the periods ~~presented are as follows:~~presented:

	Three Months Ended				Nine Months Ended				Three Months Ended		Nine Months Ended
	September 30,				September 30,				September 30,		September 30,
	2017		2016		2017		2016		2019	2018	2019	2018
Teva	$	7,663,701	$	5,522,996	$	17,043,954	$	18,513,972	41%	34%	43%	33%
AMAG		1,767,702		2,369,950		6,338,275		3,275,832	20%	30%	19%	27%
McKesson		2,339,238		1,946,261		6,333,080		5,501,810	<10%	<10%	<10%	11%
AmerisourceBergen		1,470,268		1,156,566		4,323,013		3,658,453	10%	11%	<10%	11%
Ferring		723,502		1,246,300		3,018,098		3,960,689	<10%	12%	<10%	13%

Basic loss per common share is computed by dividing net loss applicable to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted loss per common share reflects the potential dilution from the exercise or conversion of securities into common stock. Potentially dilutive stock options and other share-based awards excluded from dilutive lossANTARES PHARMA, INC.

(in thousands, except per share ~~because their effect was anti-dilutive totaled 15,084,877 and 14,100,835 at September 30, 2017 and 2016, respectively.~~amounts)

In ~~July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-11,~~ ~~Simplifying the Measurement of Inventory~~. The new standard changed the measurement principle for inventory from the lower of cost or market to lower of cost and net realizable value. The Company adopted this standard during the first quarter of 2017, and the adoption did not have an impact on the consolidated results of operations, cash flows or financial position of the Company.

~~In March 2016, the FASB issued ASU No. 2016-09,~~ ~~Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting~~ (“ASU 2016-09”). The new standard involves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. The Company adopted ASU 2016-09 effective January 1, 2017, and the adoption did not have a significant impact on the Company’s consolidated financial statements. As required under previous GAAP, the Company had estimated forfeitures in determining its periodic compensation costs related to share-based awards. Upon adoption of the new standard, the Company has elected to recognize forfeitures as they occur, and recorded a cumulative effect adjustment to accumulated deficit and additional paid-in capital of $97,000, the net of which had no impact on the Company’s consolidated results of operations, cash flows or financial position.

~~In January 2017, the FASB issued ASU 2017-04,~~ ~~Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment~~ (“ASU 2017-04”). This new standard eliminates Step 2 from the goodwill impairment test. ASU 2017-04 requires an entity to perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. ASU 2017-04 still allows the option to perform a qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The Company early adopted this standard effective January 1, 2017 and will apply the standard prospectively for its annual goodwill impairment tests. The adoption of the standard did not have an impact on the Company’s consolidated financial statements.

~~In May 2014, the FASB issued ASU No. 2014-09,~~ ~~Revenue from Contracts with Customers (Topic 606),~~ supplemented with a number of subsequent amendments issued by the FASB and collectively referred to herein as “ASU 2014-09”. This guidance requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard creates a five-step model that requires a company to identify customer contracts, identify the separate performance obligations, determine the transaction price, allocate the transaction price to the separate performance obligations and recognize revenue when each performance obligation is satisfied. This guidance also requires an entity to disclose sufficient information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Qualitative and quantitative information is required about contract balances and remaining performance obligations, significant judgments made in determining the timing of satisfaction of performance obligations (over time or at a point in time), and estimates made in determining the transaction price and amounts allocated to performance obligations.

The Company continues to monitor and evaluate the impact the adoption of this standard will have on its consolidated financial statements and has performed an initial review of its major contracts with customers. Based on the initial reviews, the Company believes the adoption of the new standard may accelerate the timing of revenue recognition for certain product sales and development revenue under certain license, development and supply agreements, and will require management to estimate and potentially recognize certain variable revenue streams such as royalties and profit sharing arrangements earlier at an amount it believes will not be subject to significant reversal.

The Company anticipates adopting the new revenue recognition standard on the effective date of January 1, 2018 utilizing the modified retrospective method of adoption, under which the cumulative effect of the change is recognized as an adjustment to the opening balance of the accumulated deficit within the consolidated balance sheet, and prior reporting periods are not retrospectively adjusted. The Company anticipates recognizing a transition adjustment upon adoption, however the amount

cannot currently be quantified, as the calculation of such will depend upon the open contracts and performance obligations as of the transition date. No significant changes to business processes or systems are currently expected to be necessary, as the processes and controls used in recording revenue transactions are largely manual.

~~In February 2016, the FASB issued ASU No. 2016-02,~~ ~~Leases (Topic 842)~~ (“ASU 2016-02”). This new standard requires entities to recognize on its balance sheet assets and liabilities associated with the rights and obligations created by leases with terms greater than twelve months. This new standard is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods and early adoption is permitted. The Company is currently evaluating the impact of ASU 2016-02 on its consolidated financial statements and currently expects that most of its operating lease commitments will be subject to the new standard and recognized as operating lease liabilities and right-of-use assets in the statement of financial position upon adoption of ASU 2016-02.

~~In May 2017, the FASB issued ASU No. 2017-09,~~ ~~Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting~~ (“ASU 2017-09”), which provides guidance on determining which changes to terms and conditions of share-based awards require an entity to apply modification accounting under Topic 718. This new standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual periods, and early adoption is permitted. The adoption of ASU 2017-09 is not expected to have a significant impact on the Company’s consolidated financial statements.

~~In May 2017, the FASB issued ASU No. 2017-05,~~ Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets (“ASU 2017-05”). The amendments clarify that an entity should identify each distinct nonfinancial asset or in-substance nonfinancial asset promised to a counterparty and derecognize each asset when a counterparty obtains control of it. ASU 2017-05 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual periods. The Company is currently evaluating the potential impact, if any, on its consolidated financial statements upon the adoption of ASU 2017-05 and expects to adopt the standard effective January 1, 2018.

On October ~~10,~~ 2017, the Company entered into an asset purchase agreement (the “Asset Purchase Agreement”) with Ferring International Center S.A. (together with Ferring Pharmaceuticals Inc. and Ferring B.V. individually and collectively referred to as “Ferring”) to sell the worldwide rights, including certain assets, related to the ~~ZOMAJET™~~ needle-free auto injector device ~~(the “Product”)~~product line for a total purchase price of $14.5 million.

The purchase price iswas to be paid in four installments consisting of the following: a $2.0 million upfront payment, which was received upon entry into the Asset Purchase Agreement and the transfer of certain assets; a second installment of $2.75 million ~~payable~~received upon delivery of certain documentation and satisfaction of certain conditions primarily related to ~~Product~~product manufacturing; a third installment of $4.75 million ~~payable~~received upon satisfaction of certain conditions, including further document transfer, the successful completion of a regulatory audit by a notified body, and a pilot manufacturing run under Ferring’s supervision; and a final installment of $5.0 million due upon Ferring’s receipt of the CE Mark needed to continue to commercialize the ~~Product~~product in certain territories and the final transfer of certain ~~Product-related~~product-related inventory, equipment and agreements to Ferring (the “Completion Date”)~~, which is expected~~.

On May 1, 2019, the Company and Ferring entered into the First Amendment of the Asset Purchase Agreement (the “First Amendment”) to ~~occur by~~extend the ~~end~~term of ~~2018.~~

~~The Company will continue~~the agreement to the third anniversary, to provide for the manufacture and ~~supply ZOMAJET™ devices until~~delivery of additional product by Antares to Ferring prior to the Completion Date, and to bifurcate the payment of the final installment of the purchase price such that $2.5 million was paid to the Company upon the First Amendment effective date, with the final remaining payment of $2.5 million to be paid at the Completion Date, which was received in October 2019.

The Company previously recorded the gain on sale of assets as it was determined that, based on the satisfaction of certain conditions and the status of remaining closing requirements, it was probable that a significant reversal of the gain will ~~receive payment~~not occur. The receipt of the $2.5 million in the nine months ended September 30, 2019 was recorded as a reduction in the related contract asset balance and a cash inflow from investing activities in the consolidated statement of cash flows.

Basic earnings or loss per common share is computed by dividing the net income or loss applicable to common stockholders by the weighted-average number of common shares outstanding for ~~devices manufactured~~the period. Diluted earnings per common share is computed in a similar manner, except that the weighted average number of shares outstanding is increased to reflect the potential dilution from the exercise or conversion of securities into common stock. Diluted earnings per share contemplate a complete conversion to common shares of all convertible instruments only if such instruments are dilutive in nature with respect to earnings per share. The dilutive effect of stock options and ~~supplied~~other equity-based awards included in the diluted weighted average common shares outstanding used in the computation of diluted earnings per share for the three months ended September 30, 2019 was 5,385. The potentially dilutive stock options and other share-based awards excluded from the calculation of loss per share for the nine months ended September 30, 2019 and the three and nine months ended September 30, 2018 because their effect was anti-dilutive totaled 19,080 and 17,386 at September 30, 2019 and 2018, respectively.

From time to time, the Company may be involved in various legal matters generally incidental to its ~~partners,~~business. Although the results of litigation and claims cannot be predicted with certainty, after discussion with legal counsel, management is not aware of any matters for which the likelihood of a ~~royalty~~loss is probable and reasonably estimable and which could have a material impact on ~~net product sales, in accordance with the existing license and supply agreements.~~its consolidated financial condition, liquidity, or results of operations.

the court granted. Pursuant to that order, plaintiff filed a Consolidated Amended Class Action Complaint on October 9, 2018. On November 26, 2018, defendants filed a motion to dismiss. Plaintiff filed an opposition to the motion on January 10, 2019 and defendants filed a reply in support of ~~Lead Plaintiff are~~their motion on February 25, 2019. On July 2, 2019, the court dismissed the complaint in its entirety without prejudice. On July 29, 2019, plaintiff filed a Consolidated Second Amended Class Action Complaint against the same parties alleging substantially similar claims. On September 12, 2019, defendants filed a motion to dismiss the Consolidated Second Amended Class Action Complaint. Plaintiffs’ opposition was filed on October 28, 2019 and defendants’ reply in support of their motion is due ~~December 22, 2017.~~November 27, 2019. The Company believes that the claims in the Smith action lack merit and intends to defend them vigorously.

On January 12, 2018, a stockholder of the Company filed a derivative civil action, captioned Chiru Mackert, derivatively on behalf of Antares Pharma, Inc., v. Robert F. Apple, et al., in the Superior Court of New Jersey Chancery Division, Mercer County (Case No. C-000011-18). On January 17, 2018, another stockholder filed a derivative action in the same court, captioned Vikram Rao, Derivatively on Behalf of Antares Pharma, Inc. v. Robert F. Apple, et al. (Case No. C-000004-18). Both complaints name Robert F. Apple, Fred M. Powell, Thomas J. Garrity, Jacques Gonella, Anton Gueth, Leonard S. Jacob, Marvin Samson and Robert P. Roche, Jr. as defendants, and the Company as nominal defendant, and they assert claims for breach of fiduciary duties, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets arising from the same facts underlying the Smith securities class action. The plaintiffs seek damages, corporate governance and internal procedure reforms and improvements, restitution, reasonable attorneys’ fees, experts’ fees, costs, and expenses. The parties have filed a stipulation consolidating the two actions and staying the proceedings pending the court’s decision on defendants’ motion to dismiss the Smith action.

On January 17, 2018, a stockholder of the Company filed a derivative civil action, captioned Robert Clark, Derivatively on Behalf of Antares Pharma, Inc. v. Robert F. Apple, et al. (“Clark”) (Case No. 3:18-cv-00703-MAS-DEA), against Robert F. Apple, Thomas J. Garrity, Jacques Gonella, Leonard S. Jacob, Marvin Samson, Anton G. Gueth and Robert P. Roche, Jr. as defendants, and Company as a nominal defendant. The action was filed in the U.S. District Court for the District of New Jersey and asserts claims for breach of fiduciary duties, unjust enrichment, abuse of control, waste of corporate assets, and a violation of Section 14(a) of the Securities Exchange Act of 1934. This complaint relates to the same facts underlying the Smith securities class action and the other derivative actions. The plaintiff in Clark seeks damages, corporate governance and internal procedure reforms and improvements, reasonable attorneys’ fees, accountants’ and experts’ fees, costs, and expenses. The parties have filed a stipulation staying the action pending the court’s decision on defendants’ motion to dismiss the Smith action.

Certain statements in this report, including statements in the management’s discussion and analysis section set forth below, may be considered “forward-looking statements” ~~as that term is defined in~~within the ~~U.S. Private~~meaning of Section 27A of the Securities ~~Litigation Reform~~ Act of ~~1995.~~1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve risks and uncertainties. Forward-looking statements can be identified by the words “expect,” “estimate,” “plan”, “project,” “anticipate,” “should,” “intend,” “may,” “will,” “believe,” “continue” or other words and terms of similar meaning in connection with any discussion of, among other things, future operating or financial performance, strategic initiatives and business strategies, regulatory or competitive environments, our intellectual property and product development. In particular, these forward-looking statements include, among others, statements about:

Forward-looking statements are based on assumptions that we have made in light of our industry experience as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. As you read and consider this report, you should understand that these statements are not guarantees of

performance results. Forward-looking statements involve known and unknown risks, uncertainties and assumptions, and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. While we believe that we have a reasonable basis for each forward-looking statement contained in this report, we caution you that these statements are based on a combination of facts and factors currently known by us and projections of the future about which we cannot be certain. Many factors may affect our ability to achieve our objectives, including:

In addition, you should refer to the “Risk Factors” sections of this report and of our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2018 for a discussion of other factors that may cause our actual results to differ materially from those described by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements contained in this report will prove to be accurate and, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material.

We encourage readers of this report to understand forward-looking statements to be strategic objectives rather than absolute targets of future performance. Forward-looking statements speak only as of the date they are made. We do not intend to update publicly any forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made or to reflect the occurrence of unanticipated events except as required by law. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, if at all.

The following discussion and analysis, the purpose of which is to provide investors and others with information that we believe to be necessary for an understanding of our financial condition, changes in financial condition and results of operations, should be read in conjunction with the financial statements, notes thereto and other information contained in this report.

Antares Pharma, Inc. (“Antares,” “we,” “our,” “us” or the “Company”) is ~~an emerging, specialty pharmaceutical~~a combination drug device company ~~that focuses~~focused primarily on the development and commercialization of self-administered parenteral pharmaceutical products and technologies. Our strategy is to identify new or existing approved drug formulations and apply our patented drug delivery technology to enhance the drug ~~compounds and~~ delivery methods. We develop, manufacture and commercialize, for ourselves or with partners, novel therapeutic products using our advanced drug delivery systems that are designed to ~~help improve~~provide commercial or functional advantages, such as improved safety and efficacy, ~~reduce~~reduced side effects, and ~~enhance~~enhanced patient comfort and adherence. Our intramuscular and subcutaneous injection technology platforms include the VIBEX^® and VIBEX^®QuickShot^®pressure-assisted auto injector ~~system~~systems suitable for branded and generic injectable drugs in unit dose containers ~~reusable needle-free spring-action injector devices, and~~as well as disposable multi-dose pen ~~injectors for use with standard cartridges.~~injectors. We have a portfolio of proprietary and partnered ~~products, including approved~~ commercial products and ~~several~~ongoing product ~~candidates~~development programs in ~~advanced~~various stages of ~~development and under active FDA review.~~development. We have formed significant strategic alliances and partnership arrangements with industry leading pharmaceutical companies including Teva, AMAG and ~~Ferring.~~Pfizer.

We market and sell XYOSTED^® (testosterone enanthate) injection in the U.S., indicated for testosterone replacement therapy in adult males for conditions associated with a deficiency or absence of endogenous testosterone. XYOSTED^® is the only FDA approved subcutaneous testosterone enanthate product for once-weekly, at-home self-administration. XYOSTED^®was approved by the FDA on September 28, 2018, and launched for commercial sale in November 2018. In connection with the launch of XYOSTED^®, we hired approximately 50 additional sales representatives and cross-trained our combined sales force to leverage our existing resources and enhance our commercial organization.

We also market and sell our proprietary product OTREXUP^® (methotrexate) injection, which ~~was launched in the U.S. in February 2014. OTREXUP~~^®is ~~the first FDA-approved~~a subcutaneous methotrexate injection for once weekly self-administration with an easy-to-use, single dose, disposable auto injector, indicated for adults with severe active rheumatoid arthritis, children with active polyarticular juvenile idiopathic arthritis and adults with severe recalcitrant psoriasis. ~~To date, we have received FDA approval for dosage strengths of 7.5 mg, 10 mg, 12.5 mg, 15 mg, 17.5 mg, 20 mg, 22.5 mg and 25 mg of OTREXUP~~^®.

~~With~~Through our commercialization partner Teva, we ~~launched~~sell Sumatriptan Injection USP indicated in the U.S. for the acute treatment of migraine and cluster headache in ~~adults, in June 2016.~~adults. We received FDA approval of our Abbreviated New Drug Application (“ANDA”) for 4 mg/0.5 mL and 6 mg/0.5 mL single-dose prefilled syringe auto-injectors, a generic equivalent to Imitrex^®STATdose Pen^®~~, in December 2015.~~. Sumatriptan Injection USP ~~represents~~was the Company’s first ANDA approval of a complex generic and second product approved using the VIBEX^® auto injector ~~platform~~platform.

We developed and supply a variation of our VIBEX^® QuickShot^® subcutaneous auto injector for use with AMAG’s progestin hormone drug Makena^® (hydroxyprogesterone caproate injection) under an exclusive license and development agreement. The Makena^® subcutaneous auto injector drug-device combination product is ~~commercialized~~a ready-to-administer treatment indicated to help reduce the risk of preterm birth in women pregnant with one baby and ~~distributed~~who spontaneously delivered one preterm baby in the past, which was approved by the FDA in February 2018. We are the exclusive supplier of the devices and the final assembled and packaged commercial product, which was launched in the U.S. for commercial sale by AMAG in March 2018, and we receive royalties on AMAG’s net sales of the product.

In collaboration with Teva, ~~under~~we developed a version of our VIBEX^® auto injector for use in a generic epinephrine auto injector product that was approved by the ~~terms~~FDA in August 2018 and commercially launched in limited quantities in late fourth quarter of 2018. Teva’s Epinephrine Injection USP is indicated for emergency treatment of severe allergic reactions including those that are life threatening (anaphylaxis) in adults and certain pediatric patients and was approved as a ~~license, supply~~generic drug product with an AB rating, meaning that it is therapeutically equivalent to Mylan, Inc.’s branded products EpiPen^® and EpiPen Jr^® and therefore, subject to state law, substitutable at the pharmacy. We are the exclusive supplier of the device and Teva is responsible for commercialization and distribution ~~arrangement.~~of the finished product, for which we also receive royalties on Teva’s net sales.

We are also ~~have two gel-based products that are commercialized~~collaborating with Teva on a multi-dose pen for a generic form of BYETTA^® (exenatide injection) for the treatment of type 2 diabetes, and another multi-dose pen for a generic form of Forteo^® (teriparatide [rDNA origin] injection) for the treatment of osteoporosis. Teva continues to work through ~~our partners~~the regulatory process with the FDA for exenatide and teriparatide using the ANDA pathway.

In August 2018, we entered into a collaboration agreement with Pfizer to develop a combination drug device rescue pen. This rescue pen will utilize the Antares QuickShot^® auto injector and an undisclosed Pfizer drug. We will develop the product and Pfizer will be responsible for obtaining FDA approval of the combination product. We intend to enter into a separate supply agreement with Pfizer pursuant to ~~licensing arrangements~~which we will provide fully packaged commercial ready finished product to Pfizer and ~~make~~Pfizer will then be responsible for commercializing the product in the U.S., pending FDA approval, for which the Company will receive royalties on net sales.

We are committed to advancing our internal research and development programs and continue to invest in the development of our proprietary product pipeline. Our research and development efforts are focused primarily on leveraging our existing product and technology platforms by broadening their applications for use in other drug device combination products, as well as exploring new pharmaceutical products, technologies and drug delivery methods.

We have historically manufactured and sold reusable, needle-free injection devices, ~~that administer injectable drugs, which are currently~~ marketed primarily through ~~our partner~~ Ferring Pharmaceuticals, Inc. and JCR Pharmaceuticals CO., Ltd. for use with human growth hormone.

On In October ~~10,~~ 2017, we entered into an asset purchase agreement (the “Asset Purchase Agreement”) with Ferring International Center S.A. (together with Ferring Pharmaceuticals Inc. and Ferring B.V. individually and collectively referred to as “Ferring”) to sell the worldwide rights, including certain assets related to the ~~ZOMAJET™~~ needle-free auto injector device product line for $14.5 million (the ~~“Product”~~“Ferring Transaction”) ~~for a total purchase price of $14.5 million.~~

. The purchase price iswas to be paid in four installments consisting ~~of the following:~~of: a $2.0 million upfront payment, which was received upon entry into the Asset Purchase Agreement and the transfer of certain assets; a second installment of $2.75 million ~~payable~~received upon delivery of certain documentation and satisfaction of certain conditions primarily related to ~~Product~~product manufacturing; a third installment of $4.75 million ~~payable~~received upon satisfaction of certain conditions including further document transfer, the successful completion of a regulatory audit by a notified body, and a pilot manufacturing run under Ferring’s supervision; and a final installment of $5.0 million due upon ~~Ferring’s receipt~~the completion date.

The Asset Purchase Agreement was amended in May 2019 in order to extend the term of the CE Mark needed to continue to commercialize the Product in certain territories and the final transfer of certain Product-related inventory, equipment and agreements to Ferring (the “Completion Date”), which is expected to occur by the end of 2018.

~~We will continue to manufacture and supply ZOMAJET™ devices until the Completion Date and will receive payment~~agreement, provide for ~~devices and a royalty on net product sales in accordance with the existing license and supply agreements.~~

~~We are developing XYOSTED~~^TM (testosterone enanthate) injection for testosterone replacement therapy, and submitted a 505 (b)(2) New Drug Application (“NDA”) to the FDA in December 2016. The NDA submission was accepted for standard review by the FDA and assigned a Prescription Drug User Fee Act (“PDUFA”) target date for completion of its review by October 20, 2017.

~~On September 22, 2017, we received FDA labeling comments with regard to the NDA and responded to the comments on September 29, 2017.~~ ~~On October 11, 2017, we received a letter from the FDA stating that,~~ ~~as part of its ongoing review of the NDA, the FDA has identified deficiencies that preclude the continuation of the discussion of labeling and postmarketing requirements/commitments. On October 20, 2017, we received a Complete Response Letter (“CRL”) from the FDA regarding our NDA for XYOSTED~~^TM, which identified two deficiencies and indicated that the NDA cannot be approved in its current form. We are assessing the content of the CRL, including the information that may be needed to resolve the deficiencies, and intend to work closely with the FDA to determine the appropriate responses to the deficiencies noted in the CRL.

~~The clinical basis of our NDA submission for XYOSTED~~^TM ~~included a multi-center, phase 3 clinical study (“QST-13-003”) evaluating the efficacy and safety of testosterone enanthate administered once-weekly by subcutaneous injection using the QuickShot~~^® auto injector in adult males diagnosed with testosterone deficiency, in which positive top-line pharmacokinetic results that showed that the primary endpoint for this study was achieved. Based upon a written response we received from the FDA related to our clinical development program for XYOSTED^TM, we conducted an additional supplemental safety study QST-15-005. The study included a screening phase, a treatment titration phase and a treatment phase for evaluation of safety and tolerability assessments, including laboratory assessments, adverse events and injection site assessments. In September 2016, we announced the successful completion of the QST-15-005 study. The results of these two studies formed the clinical basis of our NDA submission for XYOSTED^TM ~~and are further discussed in the “Research and Development Programs” section below.~~

~~The CRL for XYOSTED~~^TM ~~identified two deficiencies related to the clinical data. Based on findings in studies QST-13-003 and QST-15-005, the FDA is concerned that XYOSTED~~^T^M could cause a clinically meaningful increase in blood pressure. In addition, the CRL also raised a concern regarding the occurrence of depression and suicidality. The Company anticipates that the next step will be

~~to request a meeting with the FDA to further evaluate the deficiencies raised and to agree upon a path forward for a potential approval of XYOSTED~~^TM.

~~We are collaborating with Teva on a VIBEX~~^® ~~auto injector pen containing epinephrine used for the treatment of severe allergic reactions (anaphylaxis). Teva submitted an amendment to the VIBEX~~^® epinephrine pen ANDA in December 2014 and received a Complete Response Letter from the FDA in February 2016 in which, according to Teva, the FDA identified certain major deficiencies. Teva has disclosed that they submitted a response to this Complete Response Letter. We continue to work with Teva toward a potential approval of the epinephrine auto injector pen ANDA, which remains under active review at the FDA.

~~Our other combination product development projects in collaboration with Teva include a multi-dose pen for a generic form of BYETTA~~^® ~~(exenatide injection) for the treatment of diabetes, and another multi-dose pen for a generic form of Forteo~~^® (teriparatide [rDNA origin] injection) for the treatment of osteoporosis. Teva filed an ANDA for exenatide, which was accepted by the FDA in October 2014 and is currently under FDA review. In 2016, we announced that Teva had settled the patent litigation with ~~AstraZeneca Pharmaceuticals, LP, AstraZeneca AB, and Amylin Pharmaceuticals, LLC (collectively “AstraZeneca”)~~ ~~relating to certain AstraZeneca U.S. patents and their drug, BYETTA~~^® ~~(exenatide). AstraZeneca and Teva entered into a settlement and license agreement pursuant to which AstraZeneca granted Teva a license to manufacture and commercialize the generic version of BYETTA~~^® described in Teva’s ANDA. The settlement allows Teva to commercialize their exenatide product in the U.S. beginning October 15, 2017 or earlier under certain circumstances. Teva also filed an ANDA for a generic version of Forteo^® (teriparatide [rDNA origin] injection), which was accepted by the FDA in February 2016 and is currently under review. In response to Teva’s paragraph IV certification contained in Teva’s ANDA for teriparatide, Eli Lilly & Co (“Lilly”) filed a lawsuit against Teva alleging infringement of six U.S. patents related to Forteo^® (teriparatide [rDNA origin] injection) resulting in a 30-month stay in FDA approval of the ANDA. The stay will expire in August 2018 unless the litigation is resolved sooner. Teva also successfully concluded a decentralized procedure registration process in Europe. According to Teva, the Public Assessment Report for the decentralized procedure has been published and the product was filed in 17 countries, which addresses the majority of the market value in Europe.

~~In partnership with AMAG, we are currently developing a variation of our VIBEX~~^® ~~QuickShot~~^® ~~subcutaneous auto injector for use with AMAG’s Makena~~^® (hydroxyprogesterone caproate injection) for the treatment of pre-term birth. Under a license, development and supply agreement, AMAG is responsible for the clinical development and preparation, submission and maintenance of all regulatory applications, the manufacture and ~~supply~~delivery of additional product by Antares to Ferring prior to the ~~drug,~~completion date, and to bifurcate the marketing, sale and distribution of the product. We are responsible for the design and development of the auto-injection device, the manufacturing and supply of the device, and assembly and packagingpayment of the final ~~product. AMAG initiated a pharmacokinetic (“PK”) study~~installment of the purchase price such that $2.5 million was paid to the Company upon the effective date of the First Amendment, with the final remaining $2.5 million to be paid at the completion date, which was received in October ~~2016~~2019. With the completion of this transaction, Antares will no longer manufacture and ~~disclosed positive top line results of the study in February 2017. According to AMAG, the study successfully demonstrated comparable bioavailability between subcutaneous injection of Makena~~^® ~~compared to intra muscular injection. AMAG submitted its sNDA for the Makena~~^®~~subcutaneous auto injector in April 2017, which was accepted by the FDA and given a PDUFA target action date of February 14, 2018.~~sell any needle-free devices or components.

Our management’s discussion and analysis of our results of operations and financial condition is based upon our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”.) The preparation of our financial statements in accordance with GAAP requires us to make judgments and estimates that affect the reported amounts of assets, liabilities, revenues and expenses. We have identified certain of our significant accounting policies that we believe to be the most critical to the understanding our results of operations and financial condition because they require the most subjective and complex judgments. The following supplements our critical accounting policies, which are fully described under “Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations” in our Annual Report on Form 10-K for~~Operations

~~We sell OTREXUP~~^® in packages of four pre-filled, single-dose disposable auto injectors to wholesale pharmaceutical distributors, our customers, subject to rights of return within a period beginning six months prior to,three and ~~ending 12 months following, product expiration. We began detailing OTREXUP~~^® ~~to health care professionals in February 2014.~~

~~Prior to the first quarter of 2017, we could not reliably estimate expected returns of OTREXUP~~^® at the time of shipment given our limited sales history of the product. Accordingly, the recognition of revenue was deferred on product shipments until the rights of return no longer existed, which occurred at the earlier of the time that OTREXUP^® ~~units were dispensed through patient prescriptions or expiration of the right of return of the product. Patient prescriptions dispensed were estimated using third-party market prescription data.~~

~~In the first quarter of 2017, we determined we had developed sufficient historical information to reasonably estimate future returns of OTREXUP~~^®and began recognizing revenue upon delivery to the distributors, net of estimated returns. Accordingly, we recognized $1,297,054 in revenue for product shipped to distributors in previous periods but not previously recognized as revenue at the time of shipment, net of the returns allowance established during the first quarter of 2017. We also recognized $254,425 of related product costs in the first quarter of 2017. The net impact of these changes resulted in a decrease to net loss of $1,042,629, or less than $0.01 per share, for the nine months ended September 30, ~~2017.~~

2019, we continued to generate significant growth in our product sales and total revenue, and to invest in our commercial infrastructure and research and development activities. We reported net ~~losses~~income of ~~$5,452,521 and $6,120,983~~$1.0 million for the three months ended September 30, ~~2017 and 2016, respectively, and $13,028,382 and $19,838,556 for the nine months ended September 30, 2017 and 2016, respectively. Net~~2019 as compared to a net loss ~~per share was $0.03~~of $1.9 million for the three months ended September 30, ~~2017 as compared to $0.04 for the three months ended September 30, 2016, and $0.08 and $0.13 for~~2018. For the nine months ended September 30, ~~2017~~2019 and ~~2016,~~2018, we incurred net losses of $6.7 million and $12.7 million, respectively. We reported net income per share of $0.01 and net loss per share of $0.04 for the three and nine months ended September 30, 2019, respectively, as compared to net losses per share of $0.01 and $0.08 for the three and nine months ended September 30, 2018, respectively. Operating results for the three and nine months ended September 30, ~~2017~~2019 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2017.~~2019. The following is an analysis and discussion of our operations for the three and nine months ended September 30, ~~2017~~2019 as compared to the same periods in ~~2016.~~2018.

Three months ended September 30,

Nine months ended September 30,

2017

2016

2017

2016

OTREXUP^®

$
4,623,326

$
3,904,329

$
13,110,489

$
11,024,394

Auto injector and pen injector devices

7,946,313

5,943,786

14,489,839

15,836,179

Needle-free injector devices and components

757,886

1,201,725

3,108,422

3,720,316

Total product sales

13,327,525

11,049,840

30,708,750

30,580,889

Development revenue

1,485,091

2,101,203

7,894,640

6,466,974

Licensing revenue

19,486

38,618

1,057,204

128,040

Royalties

220,295

289,102

815,421

850,022

Total revenue

$
15,052,397

$
13,478,763

$
40,476,015

$
38,025,925

We generate revenue from proprietary and partnered product sales, license and development activities and royalty arrangements. Total revenue for the three months ended September 30, ~~2017~~2019 and ~~2016~~2018 was ~~$15,052,397~~$34.3 million and ~~$13,478,763,~~$17.9 million, respectively, representing an increase in total revenue of ~~12%~~92% on a comparative basis. ~~Revenue~~Total revenue for the nine months ended September 30, ~~2017~~2019 and 2018 was ~~$40,476,015 as compared to $38,025,925~~$86.0 million and $44.7 million, respectively, also representing an increase of 92%. The following table provides details about the components of our revenue (in thousands):

Revenue from product sales was $24.7 million and $11.6 million for the three months ended September 30, 2019 and 2018, respectively, an increase of 113% on a period over period basis. For the nine months ended September 30, ~~2016,~~2019 and 2018, we generated revenue from product sales of $63.6 million and $33.6 million, respectively, representing an increase of 6%89%. The ~~following is a detailed discussion~~increases in product revenue were driven primarily by sales of ~~the components~~recently approved products, both proprietary and partnered, as discussed below.

~~For the three months ended September 30, 2017~~ and ~~2016, we recognized revenue of $4,623,326 and $3,904,329, respectively, from sales of~~ OTREXUP^®, which isare presented net of estimated product returns and sales ~~allowances.~~allowances, generated revenue of $11.5 million and $25.2 million for the three and nine months ended September 30, 2019, respectively, as compared to $4.1 million and $11.8 million for the three and nine months ended September 30, 2018, respectively. The increase in ~~revenue~~proprietary product sales for the three and nine months ended September 30, 2019 as compared to the three and nine months ended September 30, 2018 were principally attributable to sales of XYOSTED^®, which was launched for commercial sale in late 2018.

We manufacture and sell devices, components and fully assembled and packaged product to our partners Teva, AMAG and Ferring. Partnered product sales were $13.2 million and $7.5 million for the three months ended September 30, ~~2017 as compared to the three months ended September 30, 2016 was driven by an increase in shipments to distributors~~2019 and ~~an underlying growth in prescriptions dispensed. However, as discussed in our “Critical Accounting Policies” above, we began recognizing revenue upon delivery to distributors, net of estimated returns, in the first quarter of 2017. Prior to the first quarter of 2017, due to lack of sufficient sales~~2018, respectively, and ~~returns history, revenue was initially deferred upon shipment to distributors~~$38.4 million and recognized based on estimated prescriptions dispensed or expiration of customer right of return. This change in estimation and recognition method may affect the comparability of revenues on a period over period basis.

~~We recognized revenue of $13,110,489 and $11,024,394 from OTREXUP~~^® ~~sales~~$21.8 million for the nine months ended September 30, ~~2017~~2019 and ~~2016,~~2018, respectively. The increase in ~~OTREXUP~~^® ~~revenue~~sales of partnered products for the three and nine months ended September 30, 2017 as compared with the same period in 2016 included the recognition of $1,297,054 in previously deferred revenue. If we underestimate or overestimate product returns for a given period, adjustments to revenue may be necessary in future periods.

Product sales of auto injector devices were $7,946,313 and $5,943,786 for the three months ended September 30, 2017 and 2016, respectively, and $14,489,839 and $15,836,179 for the nine months ended September 30, 2017 and 2016, respectively. We manufacture devices and sell fully assembled and packaged Sumatriptan Injection USP product to Teva. We also sell pre-launch

~~quantities of injector devices for use with Teva’s generic epinephrine pen, and auto injector devices for use with AMAG’s Makena~~^® ~~in anticipation of potential approvals and launch of these products.~~

~~The increase in auto injector product revenue for the three months ended September 30, 2017~~2019 as compared to the same period in ~~2016 was~~2018 is principally attributable to ~~an increase in shipments of Sumatriptan Injection USP and the related profit earned under the margin sharing arrangement with Teva. Revenue from auto injector~~ sales for the three months ended September 30, 2017 was principally attributable to sumatriptan product sold to Teva, totaling $6,400,000 including the profit sharing recognized during the quarter, and approximately $1,000,000 and $500,000 of pre-launch quantities of devices for use with Makena^®and epinephrine, respectively. Revenue for the three months ended September 30, 2016 included approximately $3,400,000 in shipments of sumatriptan product at cost, $1,400,000 in auto-injector devices for use with Makena^® ~~and $1,100,000 of pre-launch quantities~~ of auto injector devices ~~sold~~ to Teva for use with their generic ~~epinephrine product.~~Epinephrine Injection USP.

The decrease in product revenue from sales of auto injectors for the nine months ended September 30, 2017 as compared to the nine months ended September 30, 2016 was a result of a significant reduction in sales of pre-launch quantities of auto-injectors for use with Teva’s generic epinephrine product. As previously discussed, Teva’s ANDA for the epinephrine auto injector is under review by the FDALicensing and Teva is targeting a launch in early 2018. The decrease in revenue from pre-launch shipments of epinephrine auto injectors was partially offset by a significant increase in sales of Sumatriptan Injection USP, which was launched in June 2016.

Our revenue from reusable needle-free injector devices and disposable components was $757,886 and $1,201,725 for the three months ended September 30, 2017 and 2016, respectively, and $3,108,422 and $3,720,316 for the nine months ended September 30, 2017 and 2016 respectively. These revenues were generated primarily from sales to Ferring, which sells our needle-free injector for use with its hGH products in Europe, Asia and the U.S. We do not control our partners’ sales volume or inventory levels of our injectors and components, which can cause fluctuations in our product sales in comparative periods.

On October 10, 2017, we announced the sale of the worldwide rights related to the ZOMAJET™ needle-free auto injector device and expect the transaction to be completed by the end of 2018. During the transfer and completion period, we will continue to manufacture and supply ZOMAJET™ devices until the completion date and will receive payment for devices and a royalty on net product sales in accordance with the existing license and supply agreements.

~~Development revenue typically represents amounts earned under arrangements with partners for which we develop new products on their behalf. Frequently, we receive up-front~~Licensing and milestone payments from our partners that are initially deferred and recognized as revenue over a development period or upon completion of defined deliverables. Development revenue was $1,485,091 and $2,101,203 for the three months ended September 30, 2017 and 2016, respectively, and was $7,894,640 and $6,466,974 for the nine months ended September 30, 2017 and 2016, respectively. The increase in development revenue ~~recognized for the nine months ended September 30, 2017 as compared to 2016 was primarily a result of increases in development activities with AMAG for the Makena~~^® auto injector product offset by reductions in revenue for development activities with Teva in connection with the epinephrine auto injector and pen injector programs. The decrease in development revenue for the three months ended September 30, 2017 as compared to the same period in 2016 was primarily a result of lower development revenue related to the Makena^® ~~auto injector development program with AMAG and the exenatide pen injector program with Teva.~~

~~Licensing revenue represents amounts~~includes license fees received from partners for the right to use ~~certain~~our intellectual ~~property. Generally, the up-front~~property and amounts earned in joint development arrangements with partners under which we perform joint development activities or ~~milestone payments received were initially deferred~~develop new products on their behalf. Licensing and ~~recognized in~~development revenue ~~over the license period. We recognized $19,486~~was $1.2 million and ~~$38,618~~$2.6 million for the three months ended September 30, ~~2017~~2019 and ~~2016,~~2018, respectively, and ~~$1,057,204~~$4.4 million and ~~$128,040~~$5.6 million for the nine months ended September 30, ~~2017~~2019 and ~~2016,~~2018, respectively. The ~~significant increase~~net decreases in licensing and development revenue recognized infor the three and nine months ended September 30, ~~2017 is due~~2019 as compared to ~~the recognition of $1,000,000 in licensing fees previously received and initially deferred due to potential contractual refund rights~~2018 was a result of the ~~customer under certain circumstances. During~~$2.0 million milestone received from Teva in 2018 in connection with the ~~second quarter~~FDA’s approval of ~~2017, the License, Supply and Distribution Agreement with Teva for Sumatriptan~~Teva’s Epinephrine Injection USP, ~~was amended such that~~offset by increases in development revenue from the ~~refund provisions relating to the licensing fee was removed. Accordingly, we recognized the deferred revenue in income, as the license had been delivered~~ongoing development programs with Pfizer and ~~there were no remaining obligations related to the license granted.~~Teva.

Royalty revenue was ~~$220,295~~$8.4 million and ~~$289,102~~$3.7 million for the three months ended September 30, ~~2017~~2019 and ~~2016,~~2018, respectively, and ~~$815,421 and $850,022~~$18.1 million versus $5.5 million for the nine months ended September 30, ~~2017~~2019 and ~~2016,~~2018, respectively. ~~We receive~~The significant increases in royalty revenue were primarily attributable to royalties received from ~~Ferring related to needle-free injector device sales and~~Teva on their net sales of ~~ZOMACTON~~^TMEpinephrine Injection USP, which was launched in ~~the U.S.,~~late 2018, and royalties received from AMAG on their net sales of ~~gel-based products commercialized through partners.~~the Makena^® subcutaneous auto injector.

The following table summarizes our total revenue, cost of revenue and gross ~~profit:~~profit (in thousands):

	Three months ended September 30,						Nine months ended September 30,						Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016			2019			2018			2019			2018
Total revenue	$	15,052,397		$	13,478,763		$	40,476,015		$	38,025,925		$	34,306		$	17,868		$	86,025		$	44,733
Total cost of revenue		8,522,897			8,033,721			20,359,052			22,127,560			13,062			7,289			36,449			21,435
Gross profit	$	6,529,500		$	5,445,042		$	20,116,963		$	15,898,365		$	21,244		$	10,579		$	49,576		$	23,298
Gross profit percentage		43	%		40	%		50	%		42	%		62	%		59	%		58	%		52	%

Fluctuations in our gross profit and gross profit percentage are driven by our overall revenue mix. Our gross profit was ~~$6,529,500~~$21.2 million and ~~$20,116,963~~$10.6 million for the three months ended September 30, 2019 and 2018, respectively, and $49.6 million and $23.3 million for the nine months ended September 30, ~~2017, respectively, as compared to $5,445,042~~2019 and ~~$15,898,365 for the three and nine months ended September 30, 2016,~~2018, respectively. The increase in our gross profit ~~for the nine months ended September 30, 2017~~and gross profit percentage was primarily attributable to the ~~recognition of $1,000,000~~significant increases in ~~licensing~~our royalty revenue, ~~previously deferred, for~~ which ~~there was~~has no associated ~~costs, the recognition of previously deferred revenue related to OTREXUP~~^® ~~sales,~~incremental cost, and ~~other changes~~increases in our proprietary product ~~revenue and cost of sales, which is summarized in the following table and discussed below.~~

~~Product gross profit increased in the three months ended September 30, 2017 as compared to the three months ended September 30, 2016, primarily due to sales of OTREXUP~~^®and to sales of Sumatriptan Injection USP, which is initially sold at cost to Teva, and profit recognized from the margin sharing arrangement in trailing periods. The increase in product gross profit for the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016 included the $1,042,629 net impact of recognizing previously deferred revenue and related product costs for OTREXUP^® as described in “Critical Accounting Policies” above, and sales of Sumatriptan Injection USP, which was launched in June 2016. These increases were offset by the reduction in epinephrine auto injector device sales and the associated cost of sales. ~~The cost of product sales includes product acquisition costs from third-party manufacturers and internal manufacturing overhead expenses.~~

Other variations in ~~revenue,~~ cost of revenue and gross profit ~~are~~were attributable to our development activities, which fluctuate depending on the mix of development projects in progress and stages of completion in each period. The cost of development revenue consists primarily of direct external costs, some of which may have been previously incurred and deferred. The cost of development revenue in each period was primarily related to revenue recognized under the Teva auto injector and pen injector programs and development of the Makena^® ~~auto injector with AMAG.~~

Research and development expenses consist of external costs for clinical studies and analysis activities, design work and prototype development, FDA application fees, personnel costs and other general operating expenses associated with our research and development activities. Research and development expenses were ~~$3,289,445~~$2.9 million and ~~$5,958,550~~$3.2 million for the three months ended September 30, ~~2017~~2019 and ~~2016,~~2018, respectively and ~~$9,535,089~~$7.7 million and ~~$15,554,599~~$9.3 million for the nine months ended September 30, ~~2017~~2019 and ~~2016,~~2018, respectively. The decrease in research and development costs on a comparative basis iswas primarily due to ~~a decrease~~higher spending associated with XYOSTED^® prior to its approval in ~~external clinical and development costs related to XYOSTED~~^TM ~~for testosterone replacement therapy. We completed clinical trials and submitted our NDA for XYOSTED~~^TM ~~to the FDA in the fourth quarter of 2016.~~ O~~n October 20, 2017, we received a CRL from the FDA regarding our NDA~~

~~for XYOSTED~~^TM~~. See further discussion of our research and development activities related to XYOSTED~~^TM ~~in the “Research and Development Programs” section below.~~2018.

Selling, general and administrative expenses were ~~$8,185,865~~$16.4 million and ~~$5,622,937~~$8.7 million for three months ended September 30, ~~2017~~2019 and ~~2016,~~2018, respectively, and ~~$23,013,130~~$46.4 million and ~~$20,240,635~~$24.9 million for the nine months ended September 30, ~~2017~~2019 and ~~2016,~~2018, respectively. The ~~overall increase~~significant increases in selling, general and administrative expenses ~~was primarily~~were principally attributable to ~~an increase in~~incremental sales and marketing costs ~~associated~~incurred in connection with the ~~preparation for a potential~~recent launch of XYOSTED^TM®., including the increase in compensation and benefits expense associated with approximately 50 additional sales representatives hired in late 2018.

At September 30, ~~2017,~~2019, we had cash and cash equivalents of ~~$27,433,489 and short-term investments of $9,976,984.~~$41.9 million. Our principal liquidity needs are to fund our product manufacturing, research and development activities and ~~for the payment of~~ other operating expenses. We have not historically generated, and do not currently expect to generate, enough revenue or operating cash flow to support or grow our ~~operations and we continue to operate primarily by raising capital.~~operations. Our primary sources of liquidity ~~are~~have been proceeds from equity offerings and debt issuance. We believe that the combination of our current cash and cash equivalents, ~~short-term investments,~~ projected product sales, development revenue milestones and royalties will provide us with sufficient funds to meet our obligations and support operations through at least the next twelve months from the date of this report.

OnIn June 6, 2017, we entered into a loan and security agreement (the “Loan Agreement”) with Hercules Capital, Inc., for a term loan of up to ~~$35,000,000~~$35.0 million (the “Term Loan”), under which we initially borrowed $25.0 million (“Tranche I”.) The amortizing Term Loan is secured by substantially all of the ~~proceeds~~Company’s assets, excluding intellectual property, accrues interest at a prime-based variable rate with a maximum of ~~which are~~9.5%, provided for payment of interest-only until August 1, 2019 and matures on July 1, 2022.

On June 26, 2019, we entered into a First Amendment (the “Amendment”) to ~~be used for working capital and general corporate purposes. The first advance of $25,000,000 was funded upon execution of~~ the Loan Agreement, ~~on June 6, 2017. Under~~which increased the ~~terms~~aggregate principle amount available under the Term Loan from $35.0 million to $50.0 million. Upon signing of the ~~Loan Agreement, we~~Amendment, an additional $15.0 million (“Tranche II”) was funded to us, resulting in total principle balance outstanding under the loan of $40.0 million. We may, but are not obligated to, request one or more additional advances of at least ~~$5,000,000~~$5.0 million, not to exceed ~~$10,000,000~~$10.0 million in the aggregate ~~subject~~(“Tranche III”), between January 1, 2020 and September 15, 2020. The Amendment extended the interest-only payment period of the Term Loan to the company achieving certain corporate milestones and satisfying customary conditions. The option to request additional advances must be exercised prior to September 30, 2018. Payments under the Loan Agreement are interest only until the first principal payment is due on August 1, ~~2019, provided that~~2021, which may be further extended to August 1, 2022 if we achieve a certain loan extension milestone. The loan maturity date of the ~~interest only period~~Term Loan remains July 1, 2022, but may be extended to ~~February~~July 1, ~~2020 if~~2024 contingent upon satisfaction of a certain ~~corporate milestones are achieved. The Loan Agreement also requires us to pay a fee equal to 4.25% of the total original principal amount of all term~~ loan ~~advances (“End of Term Charge”), which is due upon repayment of the Term Loan at either maturity or earlier repayment.~~extension milestone.

OnIn August ~~11,~~ 2017, we entered into a sales agreement (the “Sales Agreement”) with Cowen and Company, LLC (“Cowen”) under which we ~~may~~could offer and sell, from time to time and at our sole discretion, shares of our common stock having an aggregate offering price of up to ~~$30,000,000~~$30.0 million through Cowen as ~~our~~the sales agent and/or ~~principal~~.as principal. Cowen ~~may~~was permitted to sell the common stock bythrough any method ~~permitted by law~~ deemed ~~to be~~ an “at the market offering” as defined in Rule 415 of the Securities Act of 1933, as ~~amended. We will pay Cowen a commission~~amended (the “ATM Facility”).

There were no sales of ~~3.0% of the gross sales proceeds of any~~ common stock made pursuant to the ATM Facility during the three months ended September 30, 2019. For the nine months ended September 30, 2019, we sold ~~through Cowen under the Sales Agreement. We are not obligated to make any sales~~2.3 million shares of ~~our~~ common stock under the ATM Facility. The sale of common stock resulted in aggregate gross proceeds of $8.1 million, less sales commission and payment of offering costs, resulting in net offering proceeds to the Company of $7.8 million.

On June 26, 2019, we delivered written notice to Cowen that we were terminating the Sales Agreement ~~and as~~effective July 6, 2019. With the provision of such notice, the ~~date~~ATM Facility is no longer available for use. The Company sold a total of ~~this report we have not sold any common stock pursuant~~4.4 million shares in connection with the ATM Facility, representing gross proceeds of approximately $15.6 million to the ~~Sales Agreement.~~Company.

Operating cash inflows are generated primarily from product sales, license and development fees and royalties. Operating cash outflows consist principally of expenditures for manufacturing costs, personnel costs, general and administrative expenses, research and development ~~projects,~~activities, and sales and marketing ~~activities.~~costs. Fluctuations in cash used in operating activities are primarily a result of the timing of cash receipts and disbursements. Net cash used in operating activities was ~~$15,482,269~~$9.5 million for the nine months ended September 30, ~~2017~~2019 and ~~$11,696,233~~$10.2 million for the nine months ended September 30, ~~2016. For~~2018. The decrease in the ~~nine months ended September 30, 2017, the increase in~~ net cash used in operating activities was primarily ~~driven by~~a result of our ~~inventory build, changes~~lower net loss in ~~accounts receivable and deferred revenue,~~2019 as compared to 2018 and other changes in operating assets and liabilities due to timing of cash receipts and cash payments.

Net cash ~~used in~~provided by investing activities was $1.2 million for the nine months ended September 30, 2019 as compared to $11.9 million for the nine months ended September 30, 2018. The net cash provided by investing activities for the nine months ended September 30, ~~2017 was $10,926,425 as compared to net cash provided~~2019 included the receipt of $2.5 million in connection with the Ferring Transaction offset by investing activities of $7,617,569 for the nine months ended September 30, 2016. The net cash outflow for the nine months ended September 30, 2017, was attributable to purchases of investment securities totaling $9,963,978 and payments for capital expenditures ~~and patent acquisition costs, while the~~of $1.3 million. The net cash inflow for the nine months ended September 30, ~~2016 was attributable to~~

~~maturities~~2018 included the receipt of $7.5 million in connection with the Ferring Transaction and $5.0 million in proceeds from investment ~~securities of $12,000,000,~~maturities, offset by payments for capital expenditures and patent acquisition ~~costs totaling $4,278,643.~~ costs.

~~Cash~~The net cash flow provided by financing activities was ~~$26,127,902~~$22.2 million for the nine months ended September 30, ~~2017,~~2019, and ~~was primarily attributable to~~consisted of $15.0 million in new debt proceeds received in connection with the ~~receipt~~Amendment of ~~$25,000,000 proceeds from debt issuance and $1,670,149~~our Term Loan, $7.8 million in net cash proceeds received from sales of our common stock through the ATM Facility, and $0.7 million proceeds from the exercise of stock options offset by payments of debt issuance costs and tax withholding payments in connection with settlement of share-based awards. The net cash used in financing activities was $40,025 for the nine months ended September 30, 2016, included the receipt of $24,000 in proceeds from the exercise of stock options and $64,000 remitted$1.1 million paid to taxing authorities in connection with net-share settled stock-based awards for which we withheld shares equivalent to the value of the employees’ ~~minimum statutory~~tax obligation for the applicable income and other employment taxes. Net cash used in financing activities for the nine months ended September 30, 2018 was $0.2 million, which included proceeds received in connection with the exercise of stock options offset by amounts paid to taxing authorities for net-share settled equity awards.

The following table presents our contractual obligations and the related payments, including interest, due by period as of September 30, ~~2017:~~2019 (in thousands):

	Payments Due by Period										Payments Due by Period
			Less than		1 - 3		3 - 5		More than				Less than		1 - 3		3 - 5		More than
	Total		1 year		years		years		5 years		Total		1 year		years		years		5 years
Long-Term Debt Obligations	$	33,706,453	$	2,217,882	$	12,930,373	$	18,558,198	$	—	$	50,844	$	3,863	$	46,981	$	-	$	—
Operating Lease Obligations		1,882,226		629,600		896,282		356,344		—		10,079		1,275		2,427		1,282		5,095
Total	$	35,588,679	$	2,847,482	$	13,826,655	$	18,914,542	$	—	$	60,923	$	5,138	$	49,408	$	1,282	$	5,095

The preceding discussion and analysis of our results of operations and financial condition is based upon our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The preparation of these consolidated financial statements requires us to make judgments and estimates that affect the reported amounts of assets, liabilities, revenues and expenses. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances. Actual results could differ from our estimates, and significant variances could materially impact our financial condition and results of operations.

The accounting policies we believe to be most critical to understanding our results of operations and financial condition related to revenue recognition and inventory valuation, which are fully described in our Annual Report on Form 10-K for the year ended December 31, 2018.

We do not have any off-balance sheet arrangements, including any arrangements with any structured finance, special purpose or variable interest entities.

We conduct clinical, regulatory, formulation development, parenteral device development and commercial development activities for internal and partnered products. The following is a discussion of our significant research and development programs.

~~XYOSTED~~^TM ~~(testosterone enanthate) Injection~~ ~~(Formerly referred to as VIBEX~~^® ~~QuickShot~~^® ~~Testosterone or “QST”)~~.

~~We are developing XYOSTED~~^TM ~~for self-administered weekly injections of testosterone enanthate for clinically diagnosed testosterone deficient men requiring testosterone replacement therapy.~~

~~On December 5, 2012, we conducted a pre-IND (Investigational New Drug application) meeting with the FDA as part of preparing to initiate clinical development of XYOSTED~~^TM, establishing an agreed upon clinical path forward. In September 2013, we announced that the first patients were dosed in a clinical study evaluating the PK profile of testosterone enanthate administered weekly by subcutaneous injection at doses of 50 mg and 100 mg via the XYOSTED^TM auto injector device in testosterone deficient adult males. The study enrolled 39 patients at nine investigative sites in the U.S. On February 20, 2014, we announced positive top line results of this study that showed that the primary endpoint was achieved in that XYOSTED^TM ~~treatment resulted in most patients achieving average levels of testosterone within the normal range from the first dose onward.~~

~~On November 3, 2014, we announced that the last patient had been enrolled in a double-blind, multiple-dose, phase III study (QST-13-003) to evaluate the efficacy and safety of XYOSTED~~^TM administered subcutaneously once each week to testosterone-deficient adult males. Patients enrolled in this study had a documented diagnosis of hypogonadism or testosterone deficiency defined as having testosterone levels below 300 ng/dL. The study includes a screening phase, a treatment titration and efficacy phase and an extended treatment phase. One hundred fifty patients were enrolled in this study. Patients meeting all eligibility criteria were assigned to receive a starting dose of XYOSTED^TM ~~once weekly for six weeks. Adjustments to dose could be made at week seven based upon the week six pre-dose blood level. The efficacy of XYOSTED~~^TM ~~and dose adjustment to regulate testosterone levels were evaluated after 12 weeks of treatment.~~

On February 25, 2015, we announced positive top-line pharmacokinetic results that showed that the primary endpoint was achieved in QST-13-003. The protocol for the study required that at the week 12 endpoint: (i) at least 75% of all patients’ C_avg ~~are within the normal range of 300 to 1100 ng/dL, with a lower limit of a 95% 2-sided confidence interval of greater than or equal to 65%, (ii) at least 85% of patients’ C~~_max ~~are less than1500 ng/dL and (iii) no more than 5% of patients had a C~~_max ~~greater than 1800 ng/dL. The primary endpoint of the population that received one or more doses of XYOSTED~~^TM was met by 139 out of 150 patients, equating to 92.7% with a 95% confidence interval of 87.3% to 96.3%. Among the 137 patients that completed all 12 weeks of dosing and PK sampling, 98.5% were within the pre-defined range. The top-line results of the PK study are summarized in the table below.

~~Overall, the regimen demonstrated a mean (± standard deviation) steady state concentration of testosterone of 553.3 ± 127.3 ng/dL at 12 weeks. Participants in the study remained on XYOSTED~~^TM ~~and were followed for an additional 40 weeks for the collection of safety data.~~

After we initiated study QST-13-003, but before we announced positive top-line pharmacokinetic results in February 2015, we received written recommendations from the FDA related to our clinical development program for XYOSTED^TM. The recommendations received were in response to various clinical, chemistry, manufacturing and controls and user study submissions that we made through November 2014. We believe that we had already factored many of the recommendations cited in the advice letter into the protocol of the ongoing QST-13-003 study and into the protocols for planned human use studies as a result of guidance provided by the FDA at the May 2014 Type C meeting. Based on a single reported occurrence of hives in our phase 2 study, the FDA recommended that we create a larger safety database, including approximately 350 subjects exposed to XYOSTED^TM with approximately 200 subjects exposed for six months and approximately 100 subjects exposed for a year. We assessed the FDA’s comments in the advice letter and their impact on the timing of the filing of a NDA for XYOSTED^TM ~~with the FDA. Based on the number of subjects in previous studies and in the current QST-13-003 study, we concluded that we would need additional subjects exposed to XYOSTED~~^TM for six months. The timing and design of the study to obtain the additional subjects and data required was determined based on further discussion with the FDA. We submitted our response to the FDA’s written recommendations in early March 2015.

In October 2015, we announced that the last patient in study QST-13-003 received their week 52 treatment, which marked the end of the treatment phase of this study. In March 2016, we announced that the pharmacokinetic results of QST-13-003 were final and reported the results from the 52-week safety study. The safety population, defined as patients who received at least one dose of study drug, was comprised of 150 patients. The most common adverse reactions (incidence ≥5%) in this phase 3 study were increased hematocrit, hypertension, increased prostate-specific antigen, upper respiratory tract infection, sinusitis, injection site bruising and headache. Serious adverse events (SAE’s) reported included one case each of worsening depression, vertigo and suicide. None of the SAE’s were considered to be related to the study drug by the investigators, however the Company determined that the case of suicide could not be ruled out as potentially being related to study drug. There have been no reported adverse events consistent with urticaria (hives), pulmonary oil micro embolism (“POME”), anaphylaxis or major adverse cardiovascular events in this study.

~~In May 2015, we received an additional written update from the FDA related to our clinical development program for XYOSTED~~^TM~~. Based on that update received from the FDA, we concluded there was an agreed upon path forward for the completion of an additional study to support the filing of a NDA for XYOSTED~~^TM. In June 2015, we finalized and submitted the protocol for the study, and in August 2015, we enrolled the first patients in the study, which is known as QST-15-005. The study was a dose-blind, multiple-dose, concentration controlled 26-week supplemental safety and pharmacokinetic study of XYOSTED^TM, which included a screening phase, a treatment titration phase, and a treatment phase for evaluation of safety and tolerability assessments including laboratory assessments, adverse events and injection site assessment. Patients meeting all eligibility criteria were assigned to receive 75 mg of XYOSTED^TM ~~once weekly for six weeks. According to the protocol, adjustments to dose could be made at week seven based upon the week six C~~_trough ~~value. XYOSTED~~^TM ~~was provided to clinical sites at dosage strengths of 100 mg, 75 mg and 50 mg to be utilized in dose titration.~~

In early November 2015, the Company announced that enrollment was complete in study QST-15-005. The safety population, defined as patients who received at least one dose of the study drug, consisted of 133 patients dosed with XYOSTED^TM. In June 2016, we announced that the last patient had completed treatment under the 26-week safety and pharmacokinetic phase 3 study QST-15-005, and in September 2016 we announced the results of the study. The most common adverse reactions (incidence ≥5%) in the QST-15-005 study were increased hematocrit, upper respiratory tract infection and injection site ecchymosis. There were four patients with treatment emergent SAE’s, which included one patient with transient visual impairment determined not to be drug related, one patient with appendicitis that was not drug related and one patient with deep vein thrombosis (“DVT”). The investigator attributed DVT as possibly drug related, which is consistent with known testosterone class SAE’s. The fourth patient had multiple hospitalizations related to septic arthritis and coronary artery disease, with a complicated clinical course post-angioplasty. These multiple reported events from the fourth patient were deemed not to be drug related. There were no reported adverse events consistent with urticaria, POME or anaphylaxis. The safety data collected also included an assessment of pain. Of the 965 injections assessed, pain was reported one time. In that instance, the pain reported was classified as mild.

~~Based upon the completion of our clinical and development work and the results of the studies detailed above, we submitted a 505 (b) (2) New Drug Application for XYOSTED~~^TM ~~to the FDA in December 2016. The NDA submission was accepted for standard review by the FDA and assigned a PDUFA target date for completion of its review by October 20, 2017.~~

~~On September 22, 2017, we received FDA labeling comments with regard to the NDA and responded to the comments on September 29, 2017.~~ ~~On October 11, 2017, we received a letter from the FDA stating that,~~ ~~as part of its ongoing review of the NDA, the FDA has identified deficiencies that preclude the continuation of the discussion of labeling and postmarketing requirements/commitments.~~ ~~On October 20, 2017, we received the CRL from the FDA regarding our NDA for XYOSTED~~^TM, which identified two deficiencies and indicated that the NDA cannot be approved in its current form. We are assessing the content of the CRL, including the information that may be needed to resolve the deficiencies, and intend to work closely with the FDA to determine the appropriate responses to the deficiencies noted in the CRL.

~~The CRL for XYOSTED~~^TM ~~identified two deficiencies related to the clinical data. Based on findings in studies QST-13-003 and QST-15-005, the FDA is concerned that XYOSTED~~^TM could cause a clinically meaningful increase in blood pressure. In addition, the CRL also raised a concern regarding the occurrence of depression and suicidality. The Company anticipates that the next step will be to request a meeting with the FDA to further evaluate the deficiencies raised and to agree upon a path forward for a potential approval of XYOSTED^TM.

~~Device Development Projects. We, along with our pharmaceutical partners, are engaged in research and development activities related to our VIBEX~~^® ~~disposable pressure assisted auto injectors and our disposable pen injectors. We have signed license agreements with Teva for our VIBEX~~^® ~~system for a product containing epinephrine and for our pen injector devices for use with generic versions of BYETTA~~^® ~~(exenatide) and Forteo~~^® ~~(teriparatide). We also have a license, development and supply agreement with AMAG for our auto injector device for use with its drug Makena~~^®. The development programs consist of determination of the device design, development of prototype tooling, production of prototype devices for testing and clinical studies, and development of commercial tooling and assembly. We expect development related to these products to continue, however, the development timelines are generally controlled by our partners and the extent of near-term and future development will be dependent on decisions made by our partners. The following is a summary of the development stages for each of the products in development with Teva and AMAG.

~~VIBEX~~^® ~~auto injector with Makena~~^®~~(hydroxyprogesterone caproate injection)~~

~~We are in the process of developing a variation of our VIBEX~~^® ~~QuickShot~~^® ~~auto injector for use with the progestin hormone drug Makena~~^® under a license, development and supply agreement with AMAG. Under this arrangement, AMAG is responsible for the clinical development and preparation, and submission and maintenance of all regulatory applications. We are responsible for the design and development of the auto-injection device.

~~AMAG initiated a PK study for the Makena~~^®auto injector in October 2016 and announced positive top-line results of the study in February 2017. According to AMAG, the study successfully demonstrated comparable bioavailability between subcutaneous injection of Makena^® ~~compared to intra muscular injection. AMAG submitted its sNDA for the Makena~~^®~~subcutaneous auto injector in April 2017, which was accepted by the FDA and given a PDUFA target action date of February 14, 2018.~~

~~We, in collaboration with Teva, have developed a VIBEX~~^® auto injector device for a product containing epinephrine. Teva is responsible for development work on the drug epinephrine, and we are responsible for development of the device. Teva filed an ANDA for the VIBEX^® ~~epinephrine pen as a generic substitute of Mylan’s branded product, EpiPen~~^®~~, which was accepted by the FDA, and amended in December 2014. We have scaled up the commercial tooling and molds for this product and delivered pre-~~

~~launch quantities of the product in anticipation of a potential approval and launch. However, Teva received a Complete Response Letter to its ANDA for the VIBEX~~^® epinephrine pen from the FDA in February 2016 in which, according to Teva, the FDA identified certain major deficiencies. Teva has disclosed that they submitted a response to the FDA’s Complete Response Letter. We continue to work with Teva toward a potential approval of the epinephrine auto injector pen ANDA, which remains under active review at the FDA.

~~We have designed and produced a pen injector product for use with exenatide for Teva. Teva filed an ANDA for a generic version of BYETTA~~^®~~, which was accepted by the FDA in October 2014 and is currently under review. Teva settled patent litigation with AstraZeneca relating to certain AstraZeneca U.S. patents and their drug, BYETTA~~^® ~~(exenatide). AstraZeneca and Teva entered into a settlement and license agreement pursuant to which AstraZeneca granted Teva a license to manufacture and commercialize the generic version of BYETTA~~^® described in Teva’s ANDA. The settlement allows Teva to commercialize their exenatide product in the U.S., assuming FDA approval, beginning October 15, 2017 or earlier under certain circumstances.

We have designed and produced a multi-dose disposable pen injector for use with teriparatide for Teva and have delivered devices for a drug stability program to support a regulatory filing. Teva is developing this product for use in both Europe and the U.S. with the European clinical/regulatory team leading the development.

~~Teva filed an ANDA for a generic version of Forteo~~^® (teriparatide [rDNA origin] injection), which was accepted by the FDA and is currently under review. In response to Teva’s paragraph IV certification contained in Teva’s ANDA for teriparatide, Lilly filed a lawsuit against Teva alleging infringement of six U.S. patents related to Forteo^® (teriparatide [rDNA origin] injection) resulting in a 30-month stay in FDA approval of the ANDA. The stay will expire in August 2018 unless the litigation is resolved sooner. Teva also successfully concluded a decentralized procedure registration process in Europe. According to Teva, the Public Assessment Report for the decentralized procedure has been published and the product was filed in 17 countries, which addresses the majority of the market value in Europe.

~~Other Research and Development Costs.~~ ~~In addition to our development of XYOSTED~~^TM and our device development projects with Teva and AMAG, we incur direct costs associated with other internal research and development projects and indirect costs that include personnel costs, administrative and other operating costs related to managing our research and development activities.

We are exposed to foreign exchange rate fluctuations of the Swiss Franc to the U.S. dollar as the financial position and operating results of our subsidiaries in Switzerland are translated into U.S. dollars for consolidation. ~~Our exposure to foreign exchange rate fluctuations also arises from transferring funds to our Swiss subsidiaries in Swiss Francs.~~ In addition, we have exposure to exchange rate fluctuations between the Euro and the U.S. dollar ~~in connection with a licensing agreement with Ferring, under which certain products sold to Ferring and royalties are denominated in Euros. Most~~for some of our product sales, including a portion of our product sales to Ferring, and our development and licensing fees and royalties are denominated in U.S. dollars, thereby significantly mitigating the risk of exchange rate fluctuations on trade receivables. transactions. We do not currently use derivative financial instruments to hedge against exchange rate risk. The effect of foreign exchange rate fluctuations on our financial results for the ~~periods~~period ended September 30, ~~2017~~2019 was not material.

We may also be exposed to interest rate risk and interest rate fluctuations as a result of our long-term debt ~~financing we obtained on June 6, 2017.~~financing. Our ~~Term Loan,~~loan, with a current outstanding principal balance of ~~$25,000,000,~~$40.0 million accrues interest at a calculated prime-based variable rate with a maximum interest rate of 9.50%~~. The calculated prime-based variable~~, which was the rate ~~was 8.75% at~~in effect during the nine months ended September 30, ~~2017. An~~2019. A hypothetical increase toor decrease in the ~~maximum~~ interest rate of ~~9.50%~~1.0% would result in additional or lower incremental annual interest expense of ~~$187,500.~~$400,000.

The Company’s management, under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. The evaluation was performed to determine whether the Company’s disclosure controls and procedures have been designed and are functioning effectively to provide reasonable assurance that the information required to be disclosed by the Company in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time

periods specified in the Securities and Exchange Commission’s rules and is accumulated and communicated to management, including the Company’s principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures as of the end of the period covered by this report were effective.

There have not been any changes in the Company’s internal control over financial reporting during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

On October 23, 2017, Randy Smith filed a complaint in the District of New Jersey, captioned Randy Smith, Individually and on Behalf of All Others Similarly Situated v. Antares Pharma, Inc., Robert F. Apple and Fred M. Powell (“Smith”), Case No. 3:17-cv-08945-MAS-DEA, on behalf of a putative class of persons who purchased or otherwise acquired Antares securities between December 21, 2016 and October 12, 2017, inclusive, asserting claims for purported violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 against Antares, Robert F. Apple and Fred M. Powell. The Smith complaint contends that defendants made false and/or misleading statements and/or failed to disclose that: (i) Antares had provided insufficient data to the FDA in connection with the NDA for XYOSTED^TM®; and (ii) accordingly, Antares had overstated the approval prospects for XYOSTED^TM®. ~~Motions~~On July 27, 2018, the court entered an order appointing Serghei Lungu as lead plaintiff, Pomerantz LLP as lead counsel, and Lite DePalma Greenberg, LLC as liaison counsel for plaintiff. On August 3, 2018, the ~~appointment~~parties submitted a stipulation and proposed order, setting forth an agreed-upon schedule for responding to the complaint, which the court granted. Pursuant to that order, plaintiff filed a Consolidated Amended Class Action Complaint on October 9, 2018. On November 26, 2018, defendants filed a motion to dismiss. Plaintiff filed an opposition to the motion on January 10, 2019 and defendants filed a reply in support of ~~Lead Plaintiff are~~their motion on February 25, 2019. On July 2, 2019, the court dismissed the complaint in its entirety without prejudice. On July 29, 2019, plaintiff filed a Consolidated Second Amended Class Action Complaint against the same parties alleging substantially similar claims. On September 12, 2019, defendants filed a motion to dismiss the Consolidated Second Amended Class Action Complaint. Plaintiffs’ opposition was filed on October 28, 2019 and defendants’ reply in support of their motion is due ~~December 22, 2017.~~November 27, 2019. The ~~company~~Company believes that the claims in the Smith action lack merit and intends to defend them vigorously.

On January 12, 2018, a stockholder of our Company filed a derivative civil action, captioned Chiru Mackert, derivatively on behalf of Antares Pharma, Inc., v. Robert F. Apple, et al., in the Superior Court of New Jersey Chancery Division, Mercer County (Case No. C-000011-18). On January 17, 2018, another stockholder filed a derivative action in the same court, captioned Vikram Rao, Derivatively on Behalf of Antares Pharma, Inc. v. Robert F. Apple, et al. (Case No. C-000004-18). Both complaints name Robert F. Apple, Fred M. Powell, Thomas J. Garrity, Jacques Gonella, Anton Gueth, Leonard S. Jacob, Marvin Samson and Robert P. Roche, Jr. as defendants, and the Company as nominal defendant, and they assert claims for breach of fiduciary duties, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets arising from the same facts underlying the Smith securities class action. The plaintiffs seek damages, corporate governance and internal procedure reforms and improvements, restitution, reasonable attorneys’ fees, experts’ fees, costs, and expenses. The parties have filed a stipulation consolidating the two actions and staying the proceedings pending the court’s decision on defendants’ motion to dismiss the Smith action.

On January 17, 2018, a stockholder of our Company filed a derivative civil action, captioned Robert Clark, Derivatively on Behalf of Antares Pharma, Inc. v. Robert F. Apple, et al. (“Clark”) (Case No. 3:18-cv-00703-MAS-DEA), against Robert F. Apple, Thomas J. Garrity, Jacques Gonella, Leonard S. Jacob, Marvin Samson, Anton G. Gueth and Robert P. Roche, Jr. as defendants, and Company as a nominal defendant. The action was filed in the U.S. District Court for the District of New Jersey and asserts claims for breach of fiduciary duties, unjust enrichment, abuse of control, waste of corporate assets, and a violation of Section 14(a) of the Securities Exchange Act of 1934. This complaint relates to the same facts underlying the Smith securities class action and the other derivative actions. The plaintiff in Clark seeks damages, corporate governance and internal procedure reforms and improvements, reasonable attorneys’ fees, accountants’ and experts’ fees, costs, and expenses. The parties have filed a stipulation staying the action pending the court’s decision on defendants’ motion to dismiss the Smith action.

In addition to the ~~risk factors and other~~ information contained in this report, you should carefully consider the risk factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2018, which could materially affect our business, financial condition or future results. The risks described ~~in this report and~~ in our Annual Report on Form 10-K are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

~~Timing and results of clinical trials to demonstrate the safety and efficacy of products as well as the FDA’s approval of products are uncertain.~~

Drug development is an inherently risky and uncertain process. Before obtaining regulatory approvals for the sale of any new product candidates, we and our partners must demonstrate through preclinical studies and clinical trials that the product is safe and effective for each intended use. Preclinical and clinical studies may fail to demonstrate the safety and effectiveness of a product. Likewise, we and our partners may not be able to demonstrate through clinical trials that a product candidate’s therapeutic benefits outweigh its risks. Even promising results from preclinical and early clinical studies do not always accurately predict results in later, large scale trials. A failure to demonstrate safety and efficacy could or would result in the failure to obtain regulatory approvals.

The rate of patient enrollment sometimes delays completion of clinical studies. There is substantial competition to enroll patients in clinical trials and such competition has delayed clinical development of our products in the past. For example, patients may not enroll in clinical trials at the rate expected or patients may drop out after enrolling in the trials or during the trials. Delays in planned patient enrollment can result in increased development costs and delays in regulatory approval. In addition, we rely on

collaboration partners that may control or make changes in trial protocol and design enhancements, or encounter clinical trial compliance-related issues, which may also delay clinical trials. Product supplies may be delayed or be insufficient to treat the patients participating in the clinical trials, or manufacturers or suppliers may not meet the requirements of the FDA or foreign regulatory authorities, such as those relating to cGMP. We and our partners may also experience delays in obtaining, or we and our partners may not obtain, required initial and continuing approval of our clinical trials from institutional review boards, FDA, or other applicable regulatory authorities. We cannot assure you that we or our partners will not experience delays or undesired results in these or any other clinical trials. Clinical trials may also be suspended, placed on hold, or terminated by us, institutional review boards, FDA, or other applicable regulatory authorities for a number of reasons, including failure to comply with the applicable regulatory requirements, including GCPs, and issues involving subject safety.

We cannot assure you that the FDA or foreign regulatory agencies will approve, clear for marketing or certify any products developed by us or our partners, on a timely basis, if at all, or, if granted, that such approval will not subject the marketing of our products to certain limits or other costly and burdensome requirements. Such limits and requirements may include warnings, including black box warnings, limitations on the indicated use, including the applicable population, contraindications, Risk Evaluation and Mitigation Strategies, and post-approval studies and/or monitoring. The FDA or foreign regulatory authorities may not agree with the assessment by us or our clinical partners of the clinical data or they may interpret it differently. Such regulatory authorities may require additional or expanded clinical trials. On October 20, 2017, we received from the FDA the CRL for XYOSTED^TM ~~which identified two deficiencies and indicated that the XYOSTED~~^TM NDA cannot be approved in its current form. We are assessing the content of the CRL, including the information that may be needed to resolve the deficiencies, which may include additional clinical trials. We intend to work closely with the FDA to determine the appropriate responses to the deficiencies noted in the CRL.

Any limitation on use imposed by the FDA or delay in or failure to obtain FDA approvals or clearances of products developed by us and our partners would adversely affect the marketing of these products and our ability to generate product revenue, which would adversely affect our financial condition and results of operations.

Before obtaining regulatory approvals for certain generic products, we and our partners must conduct limited clinical or other trials to show comparability to the branded products. A failure to obtain satisfactory results in these trials would prevent us from obtaining required regulatory approvals.

~~The CRL for XYOSTED~~^TM ~~identified two deficiencies and indicated that the XYOSTED~~^TM NDA cannot be approved in its current form. To the extent that we are unable to resolve these deficiencies in a timely manner or at all, or if we fail to obtain, or have delays in obtaining, regulatory approvals for any of our other products and product candidates, our business, financial condition and results of operations may be materially adversely affected.

~~XYOSTED~~^TM and our other products and product candidates are subject to extensive and rigorous government regulation by the FDA and other foreign regulatory agencies. The FDA regulates the research, development, pre-clinical and clinical testing, manufacture, safety, effectiveness, record keeping, reporting, labeling, storage, approval, advertising, promotion, sale, distribution, import and export of pharmaceutical and medical device products. Failure to comply with FDA and other applicable regulatory requirements may, either before or after product approval, subject us to administrative or judicially imposed sanctions.

~~In the United States, the FDA regulates drug and device products under the Federal Food, Drug, and Cosmetic Act (FFDCA), and its implementing regulations. XYOSTED~~^TM, as well as other of our products and product candidates are subject to regulation by the FDA as combination products, which means they are composed of both a drug product and device product. If marketed individually, each component would therefore be subject to different regulatory pathways and reviewed by different centers within the FDA. A combination product, however, is assigned to a center that will have primary jurisdiction over its pre-market review and regulation based on a determination of the product’s primary mode of action, which is the single mode of action that provides the most important therapeutic action. In the case of XYOSTED^TM and our other products and product candidates, the primary mode of action is attributable to the drug component of the product, which means that the Center of Drug Evaluation and Research (CDER) has primary jurisdiction over its pre-market development and review. Following product approval, however, our products may be subject to regulation under FDA’s drug and device requirements.

~~We are not permitted to market our product candidates, including XYOSTED~~^TM, in the United States unless and until we obtain regulatory approval from the FDA. To market the product in the United States, we must submit to the FDA and obtain FDA approval of a marketing application. We have historically used FDA’s 505(b)(2) NDA and ANDA pathways. A 505(b)(2) NDA must be supported by extensive clinical and preclinical data, as well as extensive information regarding chemistry, manufacturing and controls, or CMC, to demonstrate the safety and effectiveness of the applicable product candidate. An ANDA must be supported by studies demonstrating that the product candidate is bioequivalent to the reference listed drug, as well as extensive information

regarding CMC. The number and types of preclinical studies and clinical trials that will be required varies depending on the product candidate, the approval pathway, the disease or condition that the product candidate is designed to target and the regulations applicable to any particular product candidate.

Despite the time and expense associated with preclinical and clinical studies, failure can occur at any stage, and we could encounter problems that cause us to repeat or perform additional preclinical studies, CMC studies or clinical trials. We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval or commercialize our product candidates, including, failure to receive FDA or IRB authorization to begin a trial, negative or inconclusive results, slow or insufficient subject enrollment, failure to obtain adequate clinical supply of product candidates, and failure by us, our partners, Contract Research Organizations, and clinical trial sites to follow the applicable regulatory requirements, including GCPs. The FDA and similar foreign authorities could also delay, limit or deny approval of a product candidate for many reasons, including because they:

~~Significant delays also~~ ~~could shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow competitors, to bring products to market before we do.~~

~~Additionally, based on the written recommendations from the FDA related to our clinical development program for XYOSTED~~^TM~~, we launched a supplemental safety study QST-15-005 with additional participants, which we completed in 2016 in support of our NDA submission for XYOSTED~~^TM. However, the FDA may have additional recommendations or require further trials and the timing, cost and design of any such study could negatively affect our business if we incur significant costs or delays. Products of this nature may carry with them the need to monitor safety in an on-going manner, called a Risk Evaluation Mitigation Strategy, or REMS. The REMS for testosterone products is well-defined, and a class-labeling letter has been issued to all approved testosterone replacement products that will likely include being part of a clinical outcomes trial intended to explore cardiovascular risks.

Undesirable side effects caused by any product candidate that we develop, a lack of bioequivalence for ANDA product candidates, and/or an inability to demonstrate product candidate efficacy could result in the denial of regulatory approval by the FDA or other regulatory authorities for any or all targeted indications or cause us to evaluate the future of our development programs.

~~Undesirable side effects could also interrupt, delay, or halt clinical trials. The regulatory review and approval process is lengthy, expensive and inherently uncertain.~~

~~In December 2016, we submitted the XYOSTED~~^TM ~~NDA which was accepted for filing by FDA in February 2017. On October 20, 2017, we received from the FDA the CRL for XYOSTED~~^TM ~~which identified two deficiencies and indicated that the XYOSTED~~^TM NDA cannot be approved in its current form. We are assessing the content of the CRL, including the information that may be needed to resolve the deficiencies, which may include additional clinical trials. We intend to work closely with the FDA to determine the appropriate responses to the deficiencies noted in the CRL. However, there can be no assurance that we will be able to resolve these deficiencies, and, even if we resolve these deficiencies, the FDA may find that overall, the benefits of XYOSTED^TM ~~do not outweigh the risks identified in the FDA’s CRL.~~

We may never receive approval for certain of our product candidates, and even if our product candidates are approved, the approval may be subject to limitations on the indicated uses for which the products may be marketed, distribution restrictions, or to other conditions of approval; may contain significant safety warnings, including boxed warnings, contraindications, and precautions; may not be approved with label statements necessary or desirable for successful commercialization; or may contain requirements for costly post‑market testing and surveillance or other requirements, including REMS, to monitor the safety or efficacy of the products. Moreover, any future actions or inquiries by the FDA with respect to the reference listed drug may require that we make changes to our labeling or, possibly, withdraw the product from the market. Any of the foregoing may impair our ability to successfully commercialize our product candidates and may harm our business and results of operations.

~~The market price of our common stock has been, and may continue to be volatile and fluctuate significantly, which could result in substantial losses for investors.~~

The trading price for our common stock has been, and we expect it to continue to be, volatile. The price at which our common stock trades depends upon a number of factors, including our historical and anticipated operating results, our financial situation, clinical trial results, announcements of technological innovations or new products by us, our partners or our competitors, our ability or inability to raise the additional capital we may need and the terms on which we raise it, and general market and economic conditions. Some of these factors are beyond our control. Broad market fluctuations may lower the market price of our common stock and affect the volume of trading in our stock, regardless of our financial condition, results of operations, business or prospect. Among the factors that may cause the market price of our common stock to fluctuate are the risks described in this “Risk Factors” section and other factors, including:

In addition, the stock markets, in general, the NASDAQ Capital Market and the market for specialty pharmaceutical companies in particular, may experience a loss of investor confidence. Such loss of investor confidence may result in extreme price and volume fluctuations in our common stock that are unrelated or disproportionate to the operating performance of our business, financial condition or results of operations. These broad market and industry factors may materially harm the market price of our common stock and expose us to securities class action litigation. For example, on October 23, 2017, Randy Smith filed a complaint in the District of New Jersey on behalf of a putative class of persons who purchased or otherwise acquired Antares securities against Antares, Robert F. Apple and Fred M. Powell. Litigation, even if unsuccessful, could be costly to defend and divert management’s attention and resources, which could further materially harm our financial condition and results of operations.

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.

100 Princeton South, Suite 300, Ewing, NJ		08628
(Address of Principal Executive Offices)		(Zip Code)

Large accelerated filer	☐	Accelerated filer	☒

Non–accelerated filer	☐ ~~(do not check if a smaller reporting company)~~	Smaller reporting company	☐

Emerging growth company	☐		~~Emerging growth company~~	☐

			PAGE

PART I.		FINANCIAL INFORMATION	3

	Item 1.	Financial Statements	3

		Consolidated Balance Sheets as of September 30, ~~2017~~2019 (Unaudited) and December 31, ~~2016~~2018	3

		Consolidated Statements of Operations ~~(Unaudited)~~ for the three and nine months ended September 30, ~~2017~~2019 and ~~2016~~2018 (Unaudited)	4

		Consolidated Statements of Comprehensive ~~Loss (Unaudited)~~Income (Loss) for the three and nine months ended September 30, ~~2017~~2019 and ~~2016~~2018 (Unaudited)	5

		Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2019 and 2018 (Unaudited)	6

		Consolidated Statements of Cash Flows ~~(Unaudited)~~ for the nine months ended September 30, ~~2017~~2019 and ~~2016~~2018 (Unaudited)	68

		Notes to Consolidated Financial Statements (Unaudited)	79

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1520

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2627

	Item 4.	Controls and Procedures	2627

PART II.		OTHER INFORMATION	2728

	Item 1.	Legal Proceedings	2728

	Item 1A.	Risk Factors	2728

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3128

	Item 3.	Default Upon Senior Securities	3128

	Item 4.	Mine Safety Disclosures	3128

	Item 5.	Other Information	3129

	Item 6.	Exhibits	3129

		SIGNATURES	3230

	2017 Award			2016 Award			2015 Award
Closing stock price on grant date	$	2.66		$	1.12		$	2.18
Performance period starting price	$	2.17		$	1.29		$	2.52
Term of award (in years)		2.57			2.58			2.59
Volatility		54.6	%		70.1	%		60.5	%
Risk-free interest rate		1.39	%		0.97	%		0.83	%
Expected dividend yield		0.00	%		0.00	%		0.00	%
Fair value per TSR PSU	$	3.10		$	1.25		$	1.71

Population/Analysis	C_avgLower limit of the 95% 2-sided C. I.			C_avg% in range 300 – 1100 ng/dL n (%)		C_max <1500 ng/dL n (%)		C_max >1800 ng/dL n (%)
Primary analysis* N=150		87.3	%	139 (92.7	%)	137 (91.3	%)**		0	%
Completers N=137		94.8	%	135 (98.5	%)	137 (100	%)		0	%
Protocol-Required Outcomes		≥65	%	75	%	≥85	%		≤5	%

Exhibit No.		Description

31.1#		Certificate of the Chief Executive Officer of Antares Pharma, Inc. required by Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2#		Certificate of the Chief Financial Officer of Antares Pharma, Inc. required by Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1##		Certificate of the Chief Executive Officer of Antares Pharma, Inc. required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2##		Certificate of the Chief Financial Officer of Antares Pharma, Inc. required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS#		XBRL Instance Document

101.SCH#		XBRL Taxonomy Extension Schema Document

101.CAL#		XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB#		XBRL Taxonomy Extension Label Linkbase Document

101.PRE#		XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF#		XBRL Taxonomy Extension Definition Document

		ANTARES PHARMA, INC.

November ~~7, 2017~~5, 2019		/s/ Robert F. Apple
		Robert F. Apple
		President and Chief Executive Officer
		(Principal Executive Officer)

November ~~7, 2017~~5, 2019		/s/ Fred M. Powell
		Fred M. Powell
		~~Senior~~Executive Vice President and Chief Financial Officer
		(Principal Financial and Accounting Officer)