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Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2013	Sep. 13, 2013
Document And Entity Information
Entity Registrant Name	Retrophin, Inc.
Entity Central Index Key	0001438533
Document Type	10-Q
Document Period End Date	Mar. 31, 2013
Amendment Flag	true
Amendment Description	This amendment is being filed to comply with regulations.
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	No
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		18,150,837
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2013

Consolidated Balance Sheets - USD ($)	Mar. 31, 2013	Dec. 31, 2012
Assets
Cash	$ 2,503,463	$ 11,388
Other current assets	134,457	21,830
Total current assets	2,637,920	33,218
Property and equipment, net	28,419	23,790
Patents pending	18,093	18,093
Due from affiliate	137,547	137,547
Technology license, net	2,128,662	2,178,617
Total Assets	4,950,641	2,391,265
Liabilities:
Technology license liability	0	1,300,000
Accounts payable	484,719	1,023,320
Accrued expenses	720,330	2,467,796
Registration payment obligation	360,000	0
Notes payable - related parties	0	884,764
Investors deposit	0	100,000
Due to related parties	10,000	23,200
Total current liabilities	1,575,049	5,799,080
Derivative financial instruments, at estimated fair value - warrants	6,957,264	0
Total liabilities	8,532,313	5,799,080
Stockholders' Deficiency:
Preferred stock Series A $0.001 par value; 20,000,000 shares authorized; 0 issued and outstanding	0	0
Common stock $0.0001 par value; 100,000,000 shares authorized; 12,190,640 and 8,952,905 issued and outstanding, respectively	1,219	895
Additional paid-in capital	34,772,143	30,203,402
Deficit accumulated during the development stage	(38,355,034)	(33,612,112)
Total stockholders' deficit	(3,581,672)	(3,407,815)
Total liabilities and stockholders' deficit	$ 4,950,641	$ 2,391,265

Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2013	Dec. 31, 2012
STOCKHOLDERS' EQUITY ( DEFICIT )
Preferred Series A, Par Value	$ 0.001	$ 0.001
Preferred Series A,Authorized	20,000,000	20,000,000
Preferred Stock Shares A, Issued	0	0
Preferred Stock Shares A, Outstanding	0	0
Common Stock Par Value	$ 0.0001	$ 0.0001
Common Stock Shares Authorized	100,000,000	100,000,000
Common Stock Shares Issued	12,190,640	8,952,905
Common Stock Shares Outstanding	12,190,640	8,952,905

Consolidated Statements of Operations - USD ($)	3 Months Ended		25 Months Ended
Consolidated Statements of Operations - USD ($)	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013
Operating expenses
Compensation and related costs - inclusive of share base compensation $20,833, $1,535,267 and $17,758,650	$ 1,045,287	$ 1,769,831	$ 21,406,040
Professional fees - inclusive of share based compensation $138,372, $1,003,124, and $6,790,076	692,577	1,708,429	10,796,429
Selling, general and administrative	412,620	80,194	1,768,728
Technology license contingent fees	100,000	0	1,800,000
Total operating expenses	2,250,484	3,558,454	35,771,197
Operating loss	(2,250,484)	(3,558,454)	(35,771,197)
Other income (expense)
Interest income	0	3,748	21,905
Interest expense	(41,563)	(17,327)	(147,480)
Change in estimated fair value of derivative financial instruments - warrants	(2,451,659)	0	(2,451,659)
Gain (loss) on transactions denominated in foreign currencies	784	0	(6,603)
Total other expense, net	(2,492,438)	(13,579)	(2,583,837)
Net loss	$ (4,742,922)	$ (3,572,033)	$ (38,355,034)
Basic and diluted loss per share:
Net loss per common share - basic and diluted	$ (0.44)	$ (1.43)
Weighted average number of common shares outstanding during the period - basic and diluted	10,697,129	2,502,327

Condensed Consolidated Statement of Changes in Stockholders' Deficit (Unaudited) - USD ($)	Common Stock	Additional Paid-In Capital	Receivables Due From Stockholder	Accumulated Deficit	Total
Beginning Balance, Shares at Mar. 10, 2011	0
Beginning Balance, Amount at Mar. 10, 2011	$ 0	$ 0	$ 0	$ 0	$ 0
Issuance of common shares, Shares	1,608,300
Issuance of common shares, Amount	$ 161	24,839	(25,000)		0
Issuance of common shares to founders in connection with the initial capital contribution, Shares	50,000
Issuance of common shares to founders in connection with the initial capital contribution, Amount	$ 5	95			100
Incentive shares granted - employees, Shares	1,758,300
Incentive shares granted - employees, Amount	$ 176	(176)			0
Incentive shares granted- non employees, Shares	381,000
Incentive shares granted- non employees, Amount	$ 38	(38)			0
Incentive shares forfeited - employees, Shares	(45,835)
Incentive shares forfeited - employees, Amount	$ (5)	5			0
Share based compensation - employees		1,724,967			1,724,967
Share based compensation - non employees		254,332			254,332
Issuance of shares in connection with March 2011 private placement, net of fees of $66,061, Shares	253,750
Issuance of shares in connection with March 2011 private placement, net of fees of $66,061, Amount	$ 25	658,914			658,939
Prior issuance of Series A preferred in connection with March 2011 private placement, net of fees of $1,367, exchanged to common stock, Shares	36,750
Prior issuance of Series A preferred in connection with March 2011 private placement, net of fees of $1,367, exchanged to common stock, Amount	$ 4	103,629			103,633
Loan made to stockholder			(10,000)		(10,000)
Net loss				(3,268,256)	(3,268,256)
Ending Balance, Shares at Dec. 31, 2011	4,042,265
Ending Balance, Amount at Dec. 31, 2011	$ 404	2,766,567	(35,000)	(3,268,256)	(536,285)
Beginning Balance, Shares at Mar. 10, 2011	0
Beginning Balance, Amount at Mar. 10, 2011	$ 0	0	0	0	0
Loan made to stockholder					382,900
Net loss					(38,355,034)
Ending Balance, Shares at Mar. 31, 2013	12,190,640
Ending Balance, Amount at Mar. 31, 2013	$ 1,219	34,772,143	0	(38,355,034)	(3,581,672)
Beginning Balance, Shares at Dec. 31, 2011	4,042,265
Beginning Balance, Amount at Dec. 31, 2011	$ 404	2,766,567	(35,000)	(3,268,256)	(536,285)
Issuance of Series A preferred in connection with January 2012 private placement, net of fees of $61,677 recapitalized into common stock, Shares	326,963
Issuance of Series A preferred in connection with January 2012 private placement, net of fees of $61,677 recapitalized into common stock, Amount	$ 33	1,806,644			1,806,677
Issuance of Series A preferred in connection with May 2012 private placement, net of fees of $12,275, Shares	470,764
Issuance of Series A preferred in connection with May 2012 private placement, net of fees of $12,275, Amount	$ 47	1,668,979			1,669,026
Shares transferred to consultants by founder for services rendered to the Company		4,400,000			4,400,000
Shares transferred to employees by founders for services rendered to the Company		1,375,000			1,375,000
Shares issued in accordance with technology license agreement, Shares	620,000
Shares issued in accordance with technology license agreement, Amount	$ 62	1,549,938			1,550,000
Shares outstanding at time of reverse merger completed on December 12, 2012, Shares	2,585,583
Shares outstanding at time of reverse merger completed on December 12, 2012, Amount	$ 259	1,142			1,401
Incentive shares granted - employees, Shares	866,180
Incentive shares granted - employees, Amount	$ 86	(86)			0
Incentive shares granted- non employees, Shares	87,503
Incentive shares granted- non employees, Amount	$ 9	(9)			0
Incentive shares forfeited - employees, Shares	(46,353)
Incentive shares forfeited - employees, Amount	$ (5)	5			0
Share based compensation - employees		14,637,850			14,637,850
Share based compensation - non employees		1,997,372			1,997,372
Receivable due from stockholder charged to compensation			407,900		407,900
Loan made to stockholder			(372,900)		(372,900)
Net loss				(30,343,856)	(30,343,856)
Ending Balance, Shares at Dec. 31, 2012	8,952,905
Ending Balance, Amount at Dec. 31, 2012	$ 895	30,203,402	0	(33,612,112)	(3,407,815)
Incentive shares granted- non employees, Shares	12,500
Incentive shares granted- non employees, Amount	$ 1	(1)			0
Incentive shares forfeited - employees, Shares	(20,833)
Incentive shares forfeited - employees, Amount	$ (2)	2			0
Share based compensation - employees		20,833			20,833
Share based compensation - non employees		138,372			138,372
Incentive shares forfeited - non employees, Shares	(72,082)
Incentive shares forfeited - non employees, Amount	$ (7)	7			0
Issuance of common stock in connection with January 2013 private placement at $3.00 per share, net of fees of $0	272,221
Issuance of common stock in connection with January 2013 private placement at $3.00 per share, net of fees of $0	$ 27	816,637			816,664
Issuance of common stock in connection with February 2013 private placement at $3.00 per share, net of fees of $678,986 and registration payment obligation of $360,000	3,045,929
Issuance of common stock in connection with February 2013 private placement at $3.00 per share, net of fees of $678,986 and registration payment obligation of $360,000	$ 305	3,592,891			3,593,196
Loan made to stockholder					0
Net loss				(4,742,922)	(4,742,922)
Ending Balance, Shares at Mar. 31, 2013	12,190,640
Ending Balance, Amount at Mar. 31, 2013	$ 1,219	$ 34,772,143	$ 0	$ (38,355,034)	$ (3,581,672)

Consolidated Statement of Cash Flows - USD ($)	3 Months Ended		25 Months Ended
Consolidated Statement of Cash Flows - USD ($)	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013
Cash Flows From Operating Activities
Net loss	$ (4,742,922)	$ (3,572,033)	$ (38,355,034)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	52,168	313	177,408
Compensation in lieu of receivable	0	0	407,900
Share based compensation - employees	20,833	1,535,267	17,758,650
Share based compensation - non-employees	138,372	1,003,124	6,790,076
Share based payment - Technology license contingent fee	0	0	1,550,000
Change in estimated fair value of derivative financial instruments - warrants	2,451,659	0	2,451,659
Changes in operating assets and liabilities
Prepaid expenses	(112,627)	(78,392)	(134,457)
Accounts payable and accrued expenses	(2,386,067)	(110,865)	1,102,728
Net cash (used) in operating activities	(4,578,584)	(1,222,586)	(8,251,070)
Cash Flows From Investing Activities
Purchase of fixed assets	(6,842)	(2,508)	(34,488)
Purchase of intangible assets	0	0	(1,168,093)
Repayment of technology license liability	(1,300,000)	0	(1,150,000)
Cash received in merger transaction	0	0	3,721
Payments made on behalf of affiliate	0	0	(137,547)
Loans made to stockholder	0	0	(382,900)
Increase in note receivable - related party	0	(198,248)	0
Net cash (used) in investing activities	(1,306,842)	(200,756)	(2,869,307)
Cash Flows From Financing Activities
Proceeds from advances related parties	0	0	56,500
Repayment of advances receivable from related parties	(13,200)	0	(46,500)
Proceeds from note payable - related party	0	838,764	930,000
Repayment of note payable - related party	(884,764)	0	(930,000)
Investors' deposit	0	0	100,000
Proceeds received from issuance of common stock, net of fees of $678,986, $51,307, and $820,367, respectively	9,275,465	540,811	13,513,840
Repayment of stock subscription receivable	0	35,000	0
Net cash provided in financing activities	8,377,501	1,414,575	13,623,840
Net increase (decrease) in cash	2,492,075	(8,767)	2,503,463
Cash, beginning of period	11,388	10,053
Cash, end of period	2,503,463	1,286	2,503,463
Supplemental Disclosure of Cash Flow Information
Cash paid for interest	28,263	0	43,027
Non-cash investing and financing activities:
Issuance of common stock for subscription receivable	0	0	25,000
Allocation of proceeds from issuance of common stock to registration payment obligation	$ 360,000	$ 0	$ 360,000

1. DESCRIPTION OF BUSINESS

3 Months Ended

Mar. 31, 2013

Notes to Financial Statements

DESCRIPTION OF BUSINESS

NOTE 1. DESCRIPTION OF BUSINESS

Organization and Description of Business

Retrophin, Inc. (the “Company”) was incorporated as Desert Gateway, Inc. (“Desert Gateway”) in the State of Oklahoma on February 8, 2008. Desert Gateway was originally a wholly-owned subsidiary of American Merchant Data Services, Inc. (“American Merchant”). In a 2008 reorganization of American Merchant, each share of outstanding common stock of American Merchant was converted into one share of Desert Gateway, while all of American Merchant’s operating assets, liabilities and tax attributes (including accumulated losses and net operating losses) carried forward to another subsidiary of American Merchant in a downstream merger with such other subsidiary. Accordingly, American Merchant is not considered a predecessor company of the Desert Gateway for accounting or legal purposes. Following the 2008 reorganization, Desert Gateway re-domiciled to Delaware. Since inception and until Desert Gateway’s merger with Retrophin, Inc., a private company (“Former Retrophin”) in December 2012 (as described below), Desert Gateway had no existing operations, and its sole purpose was to locate and consummate a merger or acquisition with a private entity.

Former Retrophin was originally organized as a Delaware limited liability company, named Retrophin, LLC, on March 11, 2011 (“Inception”). On September 20, 2012, Retrophin filed a Certificate of Conversion to change its legal form of organization from a limited liability company to a corporation in the State of Delaware. This conversion into a corporation, which preceded the Merger on December 12, 2012, resulted in no change of ownership and was therefore considered a recapitalization of the LLC’s equity.

On September 13, 2012, Former Retrophin formed a new entity, Retrophin Pharmaceutical, Inc., a Delaware corporation and a wholly-owned subsidiary of Retrophin, Inc.

On December 12, 2012, Desert Gateway completed the transactions contemplated under the Agreement and Plan of Merger, dated as of December 12, 2012 (the “Merger Agreement”), by and among Desert Gateway, Desert Gateway Acquisition Corp., a Delaware corporation and wholly-owned subsidiary of Desert Gateway, and Former Retrophin, our predecessor, in which Former Retrophin became a wholly-owned subsidiary and the principal operating subsidiary of the Company. The transactions contemplated by the Merger Agreement are collectively referred to herein as the “Merger”. The Merger became effective on December 12, 2012, upon the filing of a certificate of merger with the Secretary of State of the State of Delaware. Accordingly, the Merger resulted in a change in control of Desert Gateway. Desert Gateway’s net assets amounted to $1,401 at the time of the merger, including $3,721 of cash and $2,320 of trade liabilities. The merger is being accounted for as a reverse merger and recapitalization of Former Retrophin into Desert Gateway, whereby Desert Gateway is the legal acquirer and Former Retrophin is the legal acquiree and the accounting acquirer in this transaction.

Upon the consummation of the Merger all of the issued and outstanding Class A Preferred shares of Former Retrophin were exchanged into the Company’s common shares at the rate of 1 to 7 (each Class A Preferred stockholder received 7 shares of the Company’s common stock) and all of the issued and outstanding share of common stock of Former Retrophin were exchanged for shares of the Company’s common stock on exchange ratio of 1 to 5 (each common stockholder of Former Retrophin received 5 shares of the Company’s common stock).

The consolidated financial statements give retroactive effect to these changes as if the merger occurred at the inception of the Company.

On February 14, 2013, the Company changed its name to “Retrophin, Inc.” through a short-form merger pursuant to Section 253 of the Delaware General Corporation Law, with its then wholly owned subsidiary, and our predecessor, Former Retrophin, with the Company continuing as the surviving corporation following the merger.

On April 1, 2013, the Company changed its fiscal year end from the last of February to a fiscal year end of December 31 in order to confirm its reporting cycle to that of Former Retrophin.

The Company is an emerging biotechnology company dedicated to developing drugs for rare and life-threatening diseases. The Company’s primary business objective is to develop and commercialize therapies for orphan diseases, such as Duchenne muscular dystrophy, or DMD, focal segmental glomerulosclerosis, and pantothenate kinase-associated neurodegeneration. The Company is considered to be a development stage company and, as such, the Company’s financial statements are prepared in accordance with the Accounting Standards Codification (“ASC”) 915 “Development Stage Entities.” The Company is subject to all of the risks and uncertainties associated with development stage companies.

3. LIQUIDITY AND FINANCIAL CONDITION AND MANAGEMENT’S PLANS

3 Months Ended

Mar. 31, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

3. LIQUIDITY AND FINANCIAL CONDITION AND MANAGEMENT’S PLANS

The Company incurred a net loss of approximately $38 million, including stock-based compensation charge of $25 million for the period from March 11, 2011 (inception) to March 31, 2013. At March 31, 2013, the Company had a cash balance of approximately $2.5 million and working capital of approximately $1.1 million. The Company’s accumulated deficit amounted to approximately $38,355,034 at March 31, 2013.

The Company has principally financed its operations from inception using proceeds from sales of its equity securities in a series of private placement transactions (see Note 11). The Company to date has no revenues, significantly limited capital resources and is subject to all of the risks and uncertainties that are typical of a development stage enterprise. Significant uncertainties include, among others, whether it will be able to raise the capital it needs to finance the start of its planned operations and whether such operations, if launched, will enable the Company to become a profitable enterprise.

On February 14, 2013, in connection with the closing of a private placement, we issued and sold an aggregate of 3,045,929 shares of common stock, for an aggregate purchase price of $9,137,787 in cash, and warrants to purchase up to an aggregate of 1,522,969 shares of common stock (Note 11).

In the second quarter of 2013, the Company, its Chief Executive Officer and a related party became party to a series of agreements to settle up to $2,286,511 of liabilities, which Company management believes are the primary obligation of the related party. The Company and the related party have entered into indemnification agreements whereby the related party has agreed to defend and hold the Company harmless against all such obligations and amounts, whether paid or unpaid, arising from these agreements. The Company paid $593,111 of the total settlement liabilities in the second quarter of 2013 and had $1,691,400 in outstanding settlement liabilities, $1,013,900 of which is past due and $677,500 of which was due in August 2013. The counter parties to these agreements reserve the right to demand payment at any time. The Chief Executive Officer also agreed to deliver or cause to be delivered 47,128 shares of common stock in the Company to one of the counter parties as a separate component of one of the agreements. Accordingly, the Company does not believe it is required to record a liability for the shared-based component of this specific agreement during the second quarter ended June 30, 2013.

There is uncertainty as to whether the related party will have sufficient liquidity to repay the Company or fund the indemnification agreements should it become necessary.

Concurrent with the execution of such settlement agreements, the Company received promissory notes from the related party whereby the related party agreed to pay the Company the principal amount of $593,111 plus interest at an annualized rate of 5% as reimbursement of the payments that the Company made to settle a portion of the agreements.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These condensed consolidated financial statements do not include any adjustments relating to the recovery of assets or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Management believes the Company’s ability to continue its operations depends on its ability to raise capital. The Company entered into a licensing agreement providing it with the use of certain technology. The Company is currently developing pre-clinical and clinical studies of drug candidates. The licensing agreement (described in Note 8) also enables the Company to sell the licensed technology as a research product or sublicense the technology to other third parties as alternative sources of revenue to its own product development efforts. The Company’s future depends on the costs, timing, and outcome of regulatory reviews of its product candidates and the costs of commercialization activities, including product marketing, sales and distribution. During the first quarter of 2013, the Company raised an aggregate of approximately $9.95 million in certain private placement transactions. The Company expects to continue to finance its cash needs through additional private equity offerings and debt financings, corporate collaboration and licensing arrangements and grants from patient advocacy groups, foundations and government agencies. Although management believes that the Company has access to capital resources, there are no commitments for financing in place at this time, nor can management provide any assurance that such financing will be available on commercially acceptable terms, if at all.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2013

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of the significant accounting policies applied in the preparation of the accompanying condensed consolidated financial statements follows:

Principles of Consolidation

The condensed consolidated financial statements represent the consolidation of the accounts of the Company and its subsidiary in conformity with U.S. GAAP. All intercompany accounts and transactions have been eliminated in consolidation.

Restatement of Previously Issued Financial Statements

The Company, while undergoing a review of its condensed consolidated financial statements for the three and six months periods ended June 30, 2013, commenced an evaluation of its accounting for a series of settlement agreements that the Company, along with certain of its related parties, entered into between April 2013 and June 2013. These agreements, which Company management originally deemed to be the primary obligation of a related party, are more fully described in Notes 3 and 13. On September 13, 2013, Company management, under the authority of the board of directors, determined that these agreements should have been disclosed in the footnotes to these condensed consolidated financial statements. Accordingly, the Company has restated these condensed consolidated financial statements to include the required disclosures.

The Company also determined that its obligation to pay liquidated damages under a registration payment arrangement that it entered into in connection with a financing transaction it completed on February 14, 2013, which required the Company to cause a registration statement to be declared effective by the Securities and Exchange Commission by May 15, 2013, should have been recorded as a liability at the date in which this financing transaction was completed. Accordingly, the Company is correcting this error by restating these condensed consolidated financial statements to allocate approximately $360,000 of the proceeds received in this financing transaction to a registration payment obligation that was deemed probable at the date that the financing transaction was completed.

The following table illustrates the effects of the adjustment on the March 31, 2013 condensed consolidated balance sheet:

	March 31, 2013
	As Reported			Adjustment			As Restated
Total current liabilities	$	1,215,049		$	360,000		$	1,575,049

Total liabilities	$	8,172,313		$	360,000		$	8,532,313

Additional paid-in capital	$	35,132,143		$	(360,000	)	$	34,772,143

Stockholders' deficit	$	(3,221,672	)	$	(360,000	)	$	(3,581,672	)

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers cash instruments with maturities of less than three months when purchased to be cash equivalents. There are no cash equivalents as of the balance sheet date.

Property and Equipment

Property and equipment are stated at cost. Depreciation is provided for using the straight-line method over the estimated useful lives of the assets. At March 31, 2013 and 2012, property and equipment consisted of computers with an estimated useful life of three years and leasehold improvements with an estimated life of four years.

Employee Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with ASC 718 Compensation — Stock Compensation (“ASC 718”). ASC 718 addresses all forms of share-based payment (“SBP”) awards including shares issued under employee stock purchase plans and stock incentive shares. Under ASC 718 awards result in a cost that is measured at fair value on the awards’ grant date, based on the estimated number of awards that are expected to vest and will result in a charge to operations.

Non-Employee Stock-Based Compensation

The Company accounts for equity instruments issued to non-employees in accordance with the provisions of ASC 505, “Equity Based Payments to Non-Employees” (“ASC 505”), Share Based Payments to Non-Employees, and ASC 718 which requires that such equity instruments are recorded at their fair value on the measurement date. The measurement of stock-based compensation is subject to periodic adjustment as the underlying equity instruments vest. Non-employee stock-based compensation charges are being amortized over their respective contractual vesting periods.

Use of Estimates

In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of expenses during the reporting period. Due to inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in these estimates. On an ongoing basis, the Company evaluates its estimates and assumptions. These estimates and assumptions include valuing equity securities in share-based payments, estimating fair value of equity instruments recorded as derivative liabilities, estimating the useful lives of depreciable and amortizable assets and estimating the fair value of long-lived assets to assets whether impairment charges may apply.

Research and Development Costs:

Research and development costs are charged to operations as incurred and consist primarily of consulting costs, contract research and development costs, and compensation costs. For the period ended March 31, 2013 and 2012, and for the period from March 11, 2011 (inception) through March 31, 2013, the Company recognized $108,735, $34,271, and $1,003,248, respectively, of research and development costs.

Patents

The Company capitalized external cost, such as filing fees and associated attorney fees, incurred to obtain issued patents and patent applications pending. The Company expense cost associated with maintaining and defending patents subsequent to their issuance in the period incurred. The Company amortizes patent cost once issued on a straight-line basis over the estimate useful lives of the patents. The Company assess the potential impairment to all capitalized patent cost when events or changes in circumstances indicate that the carrying amount of our patent may not be recoverable.

Basic and diluted Net Loss Per Share

Basic and diluted net loss per share has been computed by dividing net loss by the weighted average number of common shares outstanding during the period. All potentially dilutive common shares have been excluded since their inclusion would be anti-dilutive.

An aggregate of 1,597,969 and 0 warrants were excluded from the computation of diluted net loss per common share for the three months ended March 31, 2013 and 2012 because to do so would have an anti-dilutive effect for the periods presented.

An aggregate of 140,673 and 2,218,705 common stock equivalents (incentive shares) were excluded from the computation of diluted net loss per common share for the three months ended March 31, 2013 and 2012, because they were contingent shares subject to recall.

Derivative Instruments

The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then revalued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company calculates the fair value of the financial instruments using a probability-weighted Black-Scholes option pricing model, which is comparable to the Binomial Lattice options pricing model at inception and on each subsequent valuation date. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the instrument could be required within 12 months of the balance sheet date. (See Note 5 and Note 6).

Financial Instruments and Fair Value

ASC Topic 820, “Fair Value Measurements and Disclosures,” (“ASC Topic 820”) establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under ASC Topic 820 are described below:

Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2 – Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly; and

Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

In estimating the fair value of the Company’s derivative liabilities, the Company used a probability-weighted Black-Scholes option pricing model. (See Note 5 and Note 6).

Financial assets with carrying values approximating fair value include cash and cash equivalents as well as prepaid expenses and other current assets. Financial liabilities with carrying values approximating fair value include accounts payable and other accrued liabilities.

Registration Payment Arrangement

The Company accounted for registration rights agreements in accordance with ASC 825-20, “Registration Payment Arrangements.” ASC 825-20 addresses an issuer's accounting for registration payment arrangements. This pronouncement specifies that the contingent obligation to make future payments or otherwise transfer consideration under a registration payment arrangement, whether issued as a separate agreement or included as a provision of a financial instrument, should be separately recognized and accounted for as a contingency in accordance with ASC 450-20 “Loss Contingencies”.

Subsequent Events

The Company follows the provisions of ASC Topic 855-10, “Subsequent Events,” relating to subsequent events. This guidance establishes principles and requirements for subsequent events. This guidance defines the period after the balance sheet date during which events or transactions that may occur would be required to be disclosed in a company’s financial statements. The Company has evaluated subsequent events up to the date of issuance of this report.

Recently Issued Accounting Pronouncements

In February 2013, the FASB issued Accounting Standards Updated (“ASU”) 2013-04 “Obligations Resulting from Joint and Several Liability Arrangements for Which the Amount at the Reporting Date is Fixed”) ("ASU 2013-04"). The guidance in this update is effective for fiscal years beginning after December 15, 2013 with early adoption permitted. The guidance in this update requires companies to measure obligations resulting from joint and several liability arrangements as the sum of the amount the entity has (a) contractually agreed to pay, and (b) any additional amounts that the entity expects to pay on behalf of its co-obligors. The Company early adopted this guidance in the second quarter of 2013 (Note 13).

Excepted as noted above, management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a significant effect on the accompanying condensed consolidated financial statements.

5. DERIVATIVE FINANCIAL INSTRUMENTS

3 Months Ended

Mar. 31, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

5. DERIVATIVE FINANCIAL INSTRUMENTS

NOTE 5. DERIVATIVE FINANCIAL INSTRUMENTS

In accordance with ASC Topic 815-40, “Derivative and Hedging – Contracts in Entity’s Own Equity” (“ASC Topic 815-40”), instruments which do not have fixed settlement provisions are deemed to be derivative instruments. Based upon the Company’s analysis of the criteria contained in ASC Topic 815-40, the warrants issued in connection with the sale of the common stock during the quarter ended March 31, 2013 that do not have fixed settlement provisions, are not indexed to Company’s own stock. The fair value of the warrants are classified as derivative liabilities due to a ratchet provision that allows for a favorable adjustment to the exercise price if the Company issues additional equity instruments in the future at an effective price per share less than the exercise price then in effect.

The warrants are re-measured at each balance sheet date based on estimated fair value. Changes in estimated fair value are recorded as non-cash valuation adjustments within other income (expense) in the Company’s results of operations. The Company recorded a loss on a change in the estimated fair value of warrants of $2,451,659 for the three months ended March 31, 2013.

The Company calculated the fair value of the warrants using a probability-weighted Black-Scholes option pricing model which is comparable to the Binomial Lattice pricing model. The assumptions used at the date of issuance and at March 31, 2013 are noted in the following table:

	As of
	Date of issuance February 14, 2013			March 31, 2013
Fair market price of common stock	$	3.75		$	5.50
Expected option term	5 years			4.88 years
Risk-free interest rate		0.86	%		0.77	%
Expected volatility		101	%		101	%

Expected volatility is based on historical stock volatilities of several comparable publicly-traded companies over a period equal to the expected terms of the warrants, as the Company does not have a long trading history estimate the volatility of its own common stock. The warrants have a transferability provision. Based on the guidance provided in SEC Staff Accounting Bulletin No. 107 (“SAB 107”) for options issued with such a provision, the Company used the full contractual term as the initial expected term of the warrants. The risk free interest rate is based on the U.S. Treasury security rates for the remaining term of the warrants at the measurement date.

- Definition

The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts.

+ References

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+ Details

11. STOCKHOLDERS DEFICIT

3 Months Ended

Mar. 31, 2013

Equity [Abstract]

11. STOCKHOLDERS DEFICIT

Issuances

Common Stock

In January 2013, the Company sold an aggregate of 272,221 shares of common stock, at a purchase price of $3.00 per share in certain private placement transactions, for an aggregate purchase price of $816,664 in cash. The issuance of such shares of common stock was not registered under the Securities Act as such issuance was exempt from registration under Section 4(2) of the Securities Act and Regulation D promulgated thereunder.

On February 14, 2013, the Company closed a private placement (the “Private Placement”) of 3,045,929 shares of common stock, at a purchase price of $3.00 per share, or $9,137,787 in the aggregate, and warrants (the “Warrants”) to purchase up to an aggregate of 1,597,969 shares of common stock with an exercise price of $3.60 per such share underlying any Warrant. The Warrants are deemed to be derivative instruments due to a ratchet provision that adjusts the exercise price if the Company issues additional equity instruments in the future at an effective price per share less than the exercise price then in effect. Upon issuance, the Company recorded $4,505,605 to additional paid in capital in relation to the Warrants.

The Company concurrently entered into a registration payment arrangement requiring it to file a Form S-1 with the Securities and Exchange Commission within 30 days of the closing date of this transaction and cause it be declared effective by no later than 90 days of the closing date of this transaction. The registration payment arrangement provided for the Company to pay liquidated damages in the amount of 2% of the proceeds received in this transaction per month for each month that the Company is not in compliance with this requirement, not to exceed 10% in the aggregate. The Company determined that it was probable that it would not be in a position to comply with these requirements and therefore allocated approximately $360,000 of the proceeds received in this transaction to a registration payment obligation.

Pursuant to the Registration Rights Agreement, the Company has agreed to file a Registration Statement on Form S-1 (the “Registration Statement”) with the SEC within 30 days of the date of the Registration Rights Agreement registering the total number of shares of common stock purchased in the Private Placement and shares of common stock issuable upon exercise of the Warrants. The Company has agreed to use its reasonable efforts to have the Registration Statement declared effective within 60 days after the date of the Registration Rights Agreement (or, in the event of a “full review” by the SEC, within 90 days after the date of the Registration Rights Agreement). The Company has also agreed to use reasonable efforts to maintain the effectiveness of the Registration Statement until all of the securities covered by the Registration Statement have or may be sold by investors under Rule 144 of the Securities Act, without volume or manner-of-sale restrictions.

The Registration Rights Agreement provides that in the event the Registration Statement has not been filed or declared effective within the prescribed time period or if the Company has failed to maintain the effectiveness of the Registration Statement as required for specified time periods, the Company shall pay to the holders of registrable securities, on the date of each such event and on each monthly anniversary thereof until the applicable event is cured, partial liquidated damages equal to 2.0% of the aggregate purchase price paid by such Purchaser in the Private Placement, up to a maximum of 10.0% of such aggregate purchase price. If the Company fails to pay any partial liquidated damages pursuant to this Section in full within seven days after the date payable, the Company will pay interest thereon at a rate of 18% per annum (or such lesser maximum amount that is permitted to be paid by applicable law) to the Purchaser, accruing daily from the date such partial liquidated damages are due until such amounts, plus all such interest thereon, are paid in full.

The foregoing description of the Registration Rights Agreement does not purport to describe all of the terms and provisions thereof and is qualified in its entirety by reference to the Registration Rights Agreement, which is filed as Exhibit 10.2 to the Form 8-K filed by the Company on February 19, 2013 and is incorporated herein by reference.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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+ Details

13. SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2013

Subsequent Events [Abstract]

13. SUBSEQUENT EVENTS

Operating Lease Agreements

In October 2012, the Company entered into a sublease with a company (“Sublessor”) affiliated by common ownership that expires on November 29, 2016. The sublease agreement required the Company to pay 50% of the rent and related escalations and for the Company to pay for 50% of the utilities incurred by the Sublessor.

On April 11, 2013, the lease was assigned to the Company by the Sublessor inclusive of a $137,547 security deposit held. Unless sooner terminated, the Company will incur annualized rent expense of approximately $283,000 through the term of the lease.

Employment Agreements

Effective May 13, 2013, the Company entered into an employment agreement with Horacio Plotkin, M.D. (the “Plotkin Employment Agreement”) pursuant to which Dr. Plotkin was appointed as Chief Medical Officer of the Company.

In accordance with the terms of the Plotkin Employment Agreement, Dr. Plotkin’s initial base salary is $350,000 and he is eligible to receive a discretionary annual bonus of up to 50% of his then applicable base salary. Additionally, Dr. Plotkin received $20,000 in connection with signing the Plotkin Employment Agreement. Dr. Plotkin will also be awarded options to purchase 120,000 shares of restricted common stock of the Company at an exercise price of $8.70 per share, a pro rata portion of which will vest quarterly during the 3 years following the effective date.

Effective May 20, 2013, the Company entered into an employment agreement with Marc L. Panoff (the “Panoff Employment Agreement”) pursuant to which Mr. Panoff was appointed as Chief Financial Officer and Chief Accounting Officer of the Company.

In accordance with the terms of the Panoff Employment Agreement, Mr. Panoff’s initial base salary is $230,000 and he is eligible to receive a discretionary annual bonus of up to 50% of his then applicable base salary. Mr. Panoff will also be granted 120,000 units of restricted common stock of the Company, a pro rata portion of which will vest quarterly beginning on December 31, 2013 during the 3 years following the effective date.

Liquidated Damages under Registration Rights Agreement

The Company was required to have the Registration Statement on Form S-1 declared effective within 90 days after the offering closed. The closing date of the offering was February 14, 2013; therefore the 90th day was May 15, 2013. As of the date of this filing, the Registration Statement on form S-1 has not been declared effective. The Company has evaluated the provisions of the Registration Rights Agreement and is obligated to pay liquidated damages beginning in the second quarter of the fiscal year ending December 31, 2013.

Settlement Agreements

In the second quarter of 2013, the Company, its Chief Executive Officer and a related party became party to a series of agreements to settle up to $2,286,511 of liabilities, which Company management believes are the primary obligation of the related party. The Company and the related party have entered into indemnification agreements whereby the related party has agreed to defend and hold the Company harmless against all such obligations and amounts, whether paid or unpaid, arising from these agreements. Notwithstanding the indemnification, the Company recorded a $2,286,511 charge to operations during the quarter ended June 30, 2013 that was offset by a corresponding liability of $1,691,400 for the difference between (a) the aggregate amount of all such settlements, and (b) $593,111 of cash and non-cash consideration that the Company paid to immediately settle a portion of the agreement on behalf of the related party. The $1,691,400 settlement liability, $1,013,900 of which is past due and $677,500 of which was due in August 2013. The counter parties to these agreements reserve the right to demand payment at any time. The Chief Executive Officer also agreed to deliver or cause to be delivered 47,128 shares of common stock in the Company to one of the counter parties as a separate component of one of the agreements. Accordingly, the Company does not believe it is required to record a liability for the shared-based component of this specific agreement during the second quarter ended June 30, 2013.

There is uncertainty as to whether the related party will have sufficient liquidity to repay the Company or fund the indemnification agreements should it become necessary.

The Company applied the accounting guidance provided in ASU 2013-04. The guidance in this update is effective for fiscal years beginning after December 15, 2013 with early adoption permitted. The guidance in this update requires companies to measure obligations resulting from joint and several liability arrangements as the sum of the amount that the entity has (a) contractually agreed to pay, and (b) any additional amounts that the entity expects to pay on behalf of its co-obligors. The Company has recorded the full amount of the settlements as a charge to its operations due to uncertainty as to whether the related party will have sufficient liquidity to repay the Company or fund the indemnification agreements should it become necessary. Any amounts that the Company may recover under the note due from the related party or under the terms of the indemnification agreement, if in fact any amounts are recovered at all, would be characterized as a capital contribution at the date such payments are received.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2013

Summary Of Significant Accounting Policies Policies

Principles of Consolidation

Principles of Consolidation

Restatement of Previously Issued Financial Statements

The following table illustrates the effects of the adjustment on the March 31, 2013 condensed consolidated balance sheet:

	March 31, 2013
	As Reported			Adjustment			As Restated
Total current liabilities	$	1,215,049		$	360,000		$	1,575,049

Total liabilities	$	8,172,313		$	360,000		$	8,532,313

Additional paid-in capital	$	35,132,143		$	(360,000	)	$	34,772,143

Stockholders' deficit	$	(3,221,672	)	$	(360,000	)	$	(3,581,672	)

Cash and Cash Equivalents

Cash and Cash Equivalents

Property and Equipment

Property and Equipment

Employee Stock-Based Compensation

Employee Stock-Based Compensation

Non-Employee Stock-Based Compensation

Non-Employee Stock-Based Compensation

Use of Estimates

Use of Estimates

Research and Development Costs

Research and Development Costs:

Patents

Patents

Basic and diluted Net Loss Per Share

Basic and diluted Net Loss Per Share

Derivative Instruments

Derivative Instruments

Financial Instruments and Fair Value

Financial Instruments and Fair Value

Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2 – Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly; and

Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

In estimating the fair value of the Company’s derivative liabilities, the Company used a probability-weighted Black-Scholes option pricing model. (See Note 5 and Note 6).

Registration Payment Arrangement

Subsequent Events

Subsequent Events

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In February 2013, the FASB issued Accounting Standards Updated (“ASU”) 2013-04 “Obligations Resulting from Joint and Several Liability Arrangements for Which the Amount at the Reporting Date is Fixed”). The guidance in this update is effective for fiscal years beginning after December 15, 2013 with early adoption permitted. The guidance in this update requires companies to measure obligations resulting from joint and several liability arrangements as the sum of the amount the entity has a-contractually agreed to pay and any additional amounts that the entity expect to pay on behalf of its co-obligors. The Company early adopted this guidance in the second quarter of 2013 (Note 13).

7. ACCRUED EXPENSES (Details) - USD ($)	Mar. 31, 2013	Dec. 31, 2012
Accrued Expenses Details
Compensation related costs	$ 388,465	$ 1,022,716
Consulting fees	331,865	679,800
Legal fees	0	563,380
Finders’ fee liability	0	100,000
Interest	0	90,650
Other	0	11,250
Total	$ 720,330	$ 2,467,796

12. INCENTIVE SHARES (Details) - $ / shares	3 Months Ended
12. INCENTIVE SHARES (Details) - $ / shares	Mar. 31, 2013	Mar. 31, 2012
Number of stock Unvested Outstanding, Beginning	267,768	1,602,390
Number of Options Granted	12,500	953,683
Stock vested	(46,680)	(2,241,952)
Number of Options Forfeited	(92,915)	(46,353)
Number of stock Unvested Outstanding, Ending	140,673	267,768
Weighted Average Fair Value Outstanding, Beginning	$ 5.79	$ 4
Weighted Average Fair Value Granted	4.2	12.89
Weighted Average Fair Value, stock vested	3.41	7.34
Weighted Average Fair Value Forfeited	4	9.06
Weighted Average Fair Value Outstanding, Ending	$ 3.12	$ 5.79
Employee
Number of stock Unvested Outstanding, Beginning	52,772	1,281,225
Number of Options Granted	0	866,180
Stock vested	(5,556)	(2,048,280)
Number of Options Forfeited	(20,833)	(46,353)
Number of stock Unvested Outstanding, Ending	26,383	52,772
Non Employee
Number of stock Unvested Outstanding, Beginning	214,996	321,165
Number of Options Granted	12,500	87,503
Stock vested	(41,124)	(193,672)
Number of Options Forfeited	(72,082)	0
Number of stock Unvested Outstanding, Ending	114,290	214,996

Consolidated Statements of Operations (Parenthetical) - USD ($)	3 Months Ended		25 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013
Income Statement [Abstract]
Compensation and related costs-Share based compensation	$ 20,833	$ 1,535,267	$ 17,758,650
Professional fees-Share based compensation	$ 138,372	$ 1,003,124	$ 6,790,076

6. FAIR VALUE MEASUREMENTS (Details 2) - USD ($)	3 Months Ended		25 Months Ended
6. FAIR VALUE MEASUREMENTS (Details 2) - USD ($)	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013
Fair Value Measurements Details 2
Balance at December 31, 2012	$ 0
Issuance of common stock warrants	4,505,605
Change in fair value of common stock warrant liability	2,451,659	$ 0	$ 2,451,659
Balance at March 31, 2013	$ 6,957,264		$ 6,957,264

8. LICENSE AGREEMENT (Details Narrative) - USD ($)	3 Months Ended
8. LICENSE AGREEMENT (Details Narrative) - USD ($)	Mar. 31, 2013	Mar. 31, 2012
License Agreement Details Narrative
License agreement	$ 2,300,000
Amortization expense of the license	$ 49,955	$ 0

2. LIQUIDITY AND FINANCIAL CONDITION AND MANAGEMENT'S PLANS (Details Narrative) - USD ($)	3 Months Ended		10 Months Ended	12 Months Ended	25 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2011	Dec. 31, 2012	Mar. 31, 2013
Liquidity And Financial Condition And Managements Plans Details Narrative
Net loss	$ (4,742,922)	$ (3,572,033)	$ (3,268,256)	$ (30,343,856)	$ (38,355,034)
Stock-based compensation (Approximately)					25,000,000
Cash	2,503,463			11,388	2,503,463
Working Capital (Approximately)	1,100,000				1,100,000
Accumulated deficit	$ 38,355,034			$ 33,612,112	$ 38,355,034

5. DERIVATIVE FINANCIAL INSTRUMENTS (Details) - $ / shares	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Derivative Financial Instruments Details
Fair market price of common stock	$ 3.75	$ 5.50
Expected option term	5 years	4 years 10 months 17 days
Risk-free interest rate	0.86%	0.77%
Expected volatility	101.00%	101.00%

6. FAIR VALUE MEASUREMENTS (Details) - USD ($)	Mar. 31, 2013	Dec. 31, 2012
Derivative financial instruments, at estimated fair value	$ 6,957,264	$ 0
Quoted prices in active markets (Level 1)
Derivative financial instruments, at estimated fair value	0
Significant other observable inputs (Level 2)
Derivative financial instruments, at estimated fair value	0
Significant unobservable inputs (Level 3)
Derivative financial instruments, at estimated fair value	$ 6,957,264

9. NOTES PAYABLE (Detail Narrative) - USD ($)	3 Months Ended		25 Months Ended
9. NOTES PAYABLE (Detail Narrative) - USD ($)	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013
Notes Payable Detail Narrative
Repayment of note payable - related party	$ 884,764	$ 0	$ 930,000
Repayment of accrued interest - related party	90,650
Interest expense	$ 41,563	$ 17,327	$ 147,480