Acura Pharmaceuticals, a specialty pharmaceutical company, has been awarded a $300,000 grant (the Grant) by the National Institute On Drug Abuse (NIDA) of the National Institutes of Health (NIH) to fund phase I development of Acura's new, early stage Limitx abuse deterrent technology. The Grant is based on a proposal submitted by the company to advance the development of a self-regulating hydromorphone tablet intended to deter abuse by excess oral consumption of the tablets.

Under the terms of the Grant, the company must complete phase I development by February 28, 2015. phase I of the project is intended to optimise the formulation in preparation for clinical testing in phase II. NIDA funding of phase II development, for which an application has already been submitted, will be contingent upon assessment by NIDA of the phase I progress report and determination that the phase I milestones were achieved, review and approval of other documents necessary for continuation, and availability of funds. No assurance can be given that phase II development funding will be provided by NIDA.

Limitx technology is a new, early stage technology separate and apart from the Company's other abuse deterrent technologies, Aversion and Impede. Limitx is a novel formulation of common pharmaceutical ingredients intended to address abuse by excess oral consumption of multiple tablets. In proof of concept laboratory tests, Limitx demonstrated the ability to limit the release of the active ingredient from tablets when multiple tablets are simultaneously introduced into simulated gastric fluid. Acura has patents pending with the US Patent and Trademark office covering its Limitx technology. While the initial Limitx formulation utilises hydromorphone as its sole active ingredient, if such development proves successful, it is expected that the technology could incorporate other opioids as well. The need for abuse deterrent formulations which address excess oral consumption was stressed in the January 2013 FDA draft guidance for abuse deterrent opioids.

Phase I Research on the Company's hydromorphone tablet utilising Limitx technology is supported by the National Institute On Drug Abuse of the National Institutes of Health under Award Number R44DA037921. The results and content of any such research is solely the responsibility of Acura and does not necessarily represent the official views of the National Institutes of Health.

Acura Pharmaceuticals is a specialty pharmaceutical company engaged in the research, development and commercialisation of product candidates intended to address medication abuse and misuse, utilising its proprietary Limitx, Aversion and Impede Technologies. Limitx contains ingredients that are intended to reduce or limit the rate or extent of opioid release when multiple tablets are ingested. Aversion contains polymers that cause the drug to gel when dissolved; it also contains compounds that irritate the nasal passages. Impede is designed to disrupt the processing of pseudoephedrine from tablets into methamphetamine.

In June 2011, the US Food and Drug Administration approved our oxycodone HCl immediate-release tablets which incorporate the Aversion Technology. The Company has a development pipeline of additional Aversion Technology products containing other opioids.

In December 2012, the Company commenced commercialisation of Nexafed [pseudoephedrine hydrochloride (HCl)], a 30 mg immediate-release abuse-deterrent decongestant. The next generation pseudoephedrine tablet combines effective nasal congestion relief with Impede Technology, a unique polymer matrix that disrupts the conversion of pseudoephedrine into the dangerous drug, methamphetamine.