(6) Novartis Supply and License Agreement

     In 2004, the Company entered into a supply and licensing agreement with Novartis (the “Novartis Agreement”). By December 31, 2004, the supply portion of the Novartis Agreement was completed and the Company no longer manufactured any product. Under the Novartis Agreement, the Company granted Novartis an exclusive license (the “License”) to all of the intellectual property of the Company to the extent that it is used or useful in the production of the vapor patches that Novartis is selling under the Novartis Agreement. The License will continue in effect for the duration of the patents’ lives permitted under applicable law. Upon the expiration of the patents included in the licensed intellectual property, Novartis will have a non-revocable, perpetual, fully paid-up license to the intellectual property used or useful in the production of vapor patches for the adult cough/cold market. Novartis is required by the Novartis Agreement to pay royalties, at an agreed upon percentage, to the Company based on net sales of vapor patches by Novartis for each year the License is in effect.

     During the three and six months ended June 30, 2011, the Company recorded revenue of $19,111 and $44,118, respectively, compared to revenue recorded for the three and six months ended June 30, 2010 of $3,254 and $22,783, respectively, for royalties covered under the Novartis Agreement.