UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] Quarterly Report Pursuant To Section 13 Or 15(d) Of The

[X]	Quarterly Report Pursuant To Section 13 Or 15(d) Of The
	Securities Exchange Act Of 1934
	For the quarterly period ended March 31, 2010

Securities Exchange Act Of 1934

For the quarterly period ended September 30, 2009

[ ] Transition Report Pursuant To Section 13 Or 15(d) Of The

[ ]	Transition Report Pursuant To Section 13 Or 15(d) Of The
	Securities Exchange Act Of 1934
	For the transition period from _______________ to _______________

Securities Exchange Act Of 1934

For the transition period from _______________ to _______________

Commission File Number: 0-23317

ORE PHARMACEUTICAL HOLDINGS INC.

(Exact name of registrant as specified in its charter)

Delaware	27-1088078
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

~~610 Professional~~One ~~Drive~~Main Street, Suite ~~101~~300

~~Gaithersburg~~Cambridge, ~~Maryland~~ ~~20879~~Massachusetts 02142

(Address of principal executive offices)

(~~240~~617) ~~361~~ 649-~~4400~~2001

(Registrant’s ~~phone~~ telephone number, including area code)

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 x NO o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files): YES o NO o

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

Large accelerated filer o	Accelerated filer o	Non-accelerated filer o	Smaller reporting company x
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES o NO x

The number of shares outstanding of the Registrant’s Common Stock, $.01 par value per share, was 5,473,519 as of ~~October~~April 3130, ~~2009~~2010.

ORE PHARMACEUTICAL HOLDINGS INC.

TABLE OF CONTENTS
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Consolidated Condensed Balance Sheets at September 30, 2009 and December 31, 2008	3
	Consolidated Condensed Statements of Operations for the Three and Nine Months Ended September 30, 2009 and 2008	4
	Consolidated Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2009 and 2008	5
	Notes to Consolidated Condensed Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 4T.	Controls and Procedures	14
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	15
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	15
Item 3.	Defaults Upon Senior Securities	15
Item 4.	Submission of Matters to a Vote of Security Holders	15
Item 5.	Other Information	15
Item 6.	Exhibits	15
Signatures		16

TABLE OF CONTENTS

PART I	FINANCIAL INFORMATION

Item 1.	Financial Statements	3

	Consolidated Condensed Balance Sheets at March 31, 2010 and December 31, 2009	3
	Consolidated Condensed Statements of Operations for the Three Months Ended March 31, 2010 and 2009	4
	Consolidated Condensed Statements of Cash Flows for the Three Months Ended March 31, 2010 and 2009	5
	Notes to Consolidated Condensed Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11

Item 4T.	Controls and Procedures	13


PART II	OTHER INFORMATION

Item 1.	Legal Proceedings	14

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	14

Item 3.	Defaults Upon Senior Securities	14

Item 4.	(Removed and Reserved)	14

Item 5.	Other Information	14

Item 6.	Exhibits	14

Signatures		15

Reorganization of Ore Pharmaceuticals Inc. into a Holding Company Structure

On October 20, 2009, the stockholders of Ore Pharmaceuticals Inc. (“Ore”) adopted the Agreement and Plan of Reorganization, dated August 14, 2009, by and among Ore, Ore Pharmaceutical Holdings Inc. (the “Registrant”) and Ore Pharmaceuticals Merger Sub Inc. (the “Agreement”). The reorganization contemplated by the Agreement (the “Reorganization”) was consummated on October 20, 2009. In accordance with the Agreement, as described in the Registrant’s Registration Statement on Form S-4, originally filed with the Securities and Exchange Commission on August 14, 2009, and as amended thereafter, Ore became a wholly owned subsidiary of the Registrant and each share of Common Stock of Ore was exchanged for one share of Common Stock of the ~~Registrant. The~~ ~~Common Stock of the~~ Registrant ~~is listed for trading on The NASDAQ Capital Market under the symbol “ORXE,” the same symbol under which Ore’s Common Stock traded before the Reorganization~~. As a result of ~~the~~ ~~Reorganization,~~ the ~~Common Stock of Ore has ceased to trade on The NASDAQ Capital Market. As a result of the~~ Reorganization, the Registrant is the successor issuer to Ore pursuant to Rule 12g-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Pursuant to paragraph (a) of Rule 12g-3, the Registrant’s Common Stock is deemed registered under Section 12(g) of the Exchange Act and the Registrant has succeeded to Ore’s reporting obligations under Sections 13(a) and 15(d) of the Exchange Act. References to Ore, the Registrant or the Company for the period prior to October 20, 2009 refer to Ore Pharmaceuticals Inc. and for the period following October 20, 2009 refer to Ore Pharmaceutical Holdings Inc.

Because the Reorganization occurred subsequent to the quarterly reporting period ended September 30, 2009, the Consolidated Condensed Financial Statements consist of the accounts of Ore Pharmaceuticals Inc. (see Note 7 of the consolidated condensed financial statements included in Part 1 of this report).2

PART I FINANCIAL INFORMATION

Item 1. Financial Statements

ORE ~~PHARMACEUTICALS~~ PHARMACEUTICAL HOLDINGS INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(in thousands, except share data)

	September 30,			December 31,
	March 31,			December 31,
	2009			2008
	2010			2009
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	64,~~957~~413		$	105,~~784~~756
Marketable securities available-for-sale		68			-
Accounts receivable		65			150
Prepaid expenses		~~229~~263			~~200~~175
Notes receivable, net		790			3,252
Current portion of notes receivable, net		395			432
Other current assets		3744			7032
Total current assets		85,~~081~~180			146,~~306~~545
Property and equipment, net		3629			~~483~~33
Other intangibles, net		694			573
Intangibles, net		742			726
Note receivable, net		-			338
Other assets		25			25
Other assets		25			-
Total assets	$	5,976		$	7,329
Total assets	$	8,836		$	15,700
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	~~758~~304		$	~~623~~287
Accrued compensation and employee benefits		~~144~~136			~~1,185~~140
Other accrued expenses		12,~~434~~329			12,~~267~~510
Current portion of long-term debt		~~450~~325			~~477~~450
Total current liabilities		23,~~786~~094			3,~~552~~387
Deferred rent		2422			-23
Total liabilities		23,~~810~~116			3,~~552~~410
Commitments and contingencies		-			-
Stockholders' equity:
Preferred stock, $.01 par value; 10,000,000 shares authorized; and no shares issued and
Preferred stock, $.01 par value; 2,000,000 shares authorized; and no shares issued and
outstanding as of September 30, 2009 and December 31, 2008		-			-
outstanding as of March 31, 2010 and December 31, 2009		-			-
Common stock, $.01 par value; 60,000,000 shares authorized; 5,473,519 and 5,483,519 shares
Common stock, $.01 par value; 15,000,000 shares authorized; 5,473,519 shares issued
issued and outstanding as of September 30, 2009 and December 31, 2008, respectively		55			55
and outstanding as of March 31, 2010 and December 31, 2009		55			55
Additional paid-in-capital		385,~~019~~131			~~384~~385,~~922~~076
Accumulated other comprehensive income		68			-
Accumulated deficit		(382,326	)		(381,212	)
Accumulated deficit		(379,116	)		(372,829	)
Total stockholders' equity		2,860			3,919
Total stockholders' equity		6,026			12,148
Total liabilities and stockholders' equity	$	5,976		$	7,329
Total liabilities and stockholders' equity	$	8,836		$	15,700

See accompanying notes.

ORE ~~PHARMACEUTICALS~~ PHARMACEUTICAL HOLDINGS INC.

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

	Three Months Ended						~~Nine Months Ended~~
	September 30,						September 30,
	March 31,
	2009			2008			2009			2008
	2010			2009
Services revenue	$	-		$	200		$	25		$	1,950
Revenue	$	-		$	-
Expenses:
Research and development		~~501~~339			~~2,342~~941			~~2,080~~			~~8,547~~
Selling, general and administrative		~~986~~784			2,~~632~~289			~~5,292~~			~~10,302~~
Total expenses		1,~~487~~123			43,~~974~~230			~~7,372~~			~~18,849~~
Loss from operations		(1,~~487~~123	)		(43,~~774~~230	)		~~(7,347~~	)		~~(16,899~~	)
Interest (income), net		(335	)		(146	)		(502	)		(648	)
Interest income, net		9			86
(Income)/loss on equity investments		(558	)		2,964			(558	)		2,964
Net loss	$	(1,114	)	$	(3,144	)
Gain on sale of DioGenix Inc.		-			(146	)		-			(146	)
Basic and diluted net loss per share	$	(0.20	)	$	(0.57	)
Net loss	$	(594	)	$	(7,446	)	$	(6,287	)	$	(19,069	)
Shares used in computing basic and diluted net loss per share		5,474			5,474
Basic and diluted net loss per share	$	(0.11	)	$	(1.36	)	$	(1.15	)	$	(3.33	)
Shares used in computing basic and diluted
net loss per share		5,474			5,477			5,474			5,719

See accompanying notes.

ORE ~~PHARMACEUTICALS~~ PHARMACEUTICAL HOLDINGS INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Nine Months Ended
	Three Months Ended
	September 30,
	March 31,
	2009			2008
	2010			2009
Cash flows from operating activities:
Loss from operations	$	(6,287	)	$	(19,069	)
Net loss	$	(1,114	)	$	(3,144	)
Adjustments to reconcile loss from operations to net cash flows
from operating activities:
Depreciation and amortization		~~102~~7			~~847~~56
Non-cash stock-based compensation expense		9760			~~130~~28
Write-down of equity investment		-			2,964
Other non-cash items		(4	)		(30	)
Gain on sale of equity investment		(558	)		-
Gain on sale of DioGenix Inc.		-			(146	)
Other non-cash items		141			22
Changes in operating assets and liabilities:
Prepaids and other assets		(21	)		2,437
Accounts receivable		85			-
Accounts payable		135			(244	)
Prepaids and other assets		(100	)		(130	)
Accrued expenses		(850	)		(1,688	)
Accounts payable		17			(222	)
Deferred revenue		-			(1,500	)
Accrued expenses and deferred rent		(191	)		(206	)
Net cash flows from operating activities		(71,~~241~~240	)		(163,~~247~~648	)
Cash flows from investing activities:
Purchases of property and equipment		(20	)		(171	)
Proceeds received from notes receivables		40			-
Proceeds from sale of property and equipment		70			-
Cash paid for patent costs		(18	)		(45	)
Purchases of licenses and patent costs		(167	)		(383	)
Net cash flows from investing activities		22			(45	)
Proceeds from sale of marketable securities available-for-sale		-			10,527
Purchase of marketable securities available-for-sale		-			(4,501	)
Proceeds received from notes receivables		3,000			-
Proceeds from sale of equity investment		558			-
Net proceeds received from sale of Genomics Assets		-			412
Net proceeds received from sale of Preclinical Division		-			272
Net proceeds received from sale of DioGenix Inc.		-			500
Net cash flows from investing activities		3,441			6,656
Cash flows from financing activities:
Purchase of common stock		-			(2,991	)
Repayments of debt		(125	)		(14	)
Repayments of an equipment loan		(27	)		(38	)
Net cash flows from financing activities		(125	)		(14	)
Net cash flows from financing activities		(27	)		(3,029	)
Net decrease in cash and cash equivalents		(1,343	)		(3,707	)
Net decrease in cash and cash equivalents		(3,827	)		(12,620	)
Cash and cash equivalents, beginning of period		5,756			10,784
Cash and cash equivalents, beginning of period		10,784			26,323
Cash and cash equivalents, end of period	$	4,413		$	7,077
Cash and cash equivalents, end of period	$	6,957		$	13,703
Supplemental disclosure:
Interest paid	$	-44		$	4-
Non-cash investing transactions:
Fair value of promissiory note received in connection with the sale of DioGenix Inc.	$	-		$	673

See accompanying notes.

ORE ~~PHARMACEUTICALS~~ PHARMACEUTICAL HOLDINGS INC.

Notes to Consolidated Condensed Financial Statements

~~September 30~~March 31, ~~2009~~2010

(in thousands, except share and per share data)

(unaudited)

Note 1 — Organization and summary of significant accounting policies

Description of Business

Ore ~~Pharmaceuticals~~ Pharmaceutical Holdings Inc. (the “Company”) is afocused pharmaceutical asset management company. The Company acquires interests in pharmaceutical assets whose value, it believes, it can significantly enhance through targeted development, with the goal of then monetizing these assets through sales or out-licensing transactions. The Company currently is focusing on developing and monetizing its current portfolio, which includes four clinical-stage compounds in-licensed from major pharmaceutical ~~companies. The~~ ~~four compounds in the Company’s development portfolio are~~companies: ORE1001, its lead compound, ORE10002, ORE5002 (tiapamil) and ORE5007 (romazarit).

On October 20, 2009, ~~the~~Ore ~~Company~~Pharmaceuticals Inc. completed a reorganization that was undertaken primarily in order to better protect the value of ~~the~~its ~~Company’s~~ approximately $~~324~~329,000 in gross net operating and capital loss carryforwards that can be used to reduce the amount of income tax ~~the~~that ~~Company~~it could be required to pay on future earnings from its business. As a result of this reorganization, ~~the~~Ore ~~Company~~ Pharmaceuticals Inc. became a wholly owned subsidiary of a new company, Ore Pharmaceutical Holdings Inc., as of October 20, 2009 ~~(see Note 7)~~.

Following the reorganization, the Company intended to pursue a strategy of acquiring interests in pharmaceutical assets whose value could be significantly enhanced through targeted development, with the goal of then monetizing these assets through sale or out-licensing transactions. The Company anticipated that it would fund these programs through designing, raising and investing alternative financing vehicles.

In light of the litigation that is ongoing with two landlords of facilities located in Gaithersburg, Maryland, the Company has determined that it will be unable to execute upon its strategy for the foreseeable future due to the potential financial impacts of those lawsuits on the Company as well as the reluctance of potential investors to participate in alternative financing vehicles managed by a public entity. As a result, the Company is taking action to further reduce costs and recognize the value of certain of the Company’s assets while the Company continues the litigation related to the leases.

On April 14, 2010, the Company entered into a Management Services Agreement, effective April 26, 2010, by and between the Company and p-Value Capital Management, LLC, a private pharmaceutical asset management firm (“p-Value”) (the “Agreement”). The Board of Directors of the Company anticipates that the Agreement will further reduce costs to the Company while still permitting the operations of the Company to continue and the potential value of the assets of the Company to be recognized over time. Under the Agreement, the Company has engaged p-Value to manage the operations of the Company on behalf, and under the direction, of the Board of Directors. See Note 5 for further discussion of this agreement.

In September 2009, the Company received notice from The NASDAQ Stock Market (“Nasdaq”), that its stock would be subject to delisting if the Company did not regain compliance by having a closing bid price equal or above $1.00 per share for a minimum of 10 consecutive trading days prior to March 15, 2010. On March 16, 2010, the Company was further notified by Nasdaq that it had not regained compliance and that trading in the Company’s stock would be suspended on March 25, 2010 in the event it did not submit an appeal to Nasdaq. The Company determined not to submit an appeal and, as a result, trading in its stock on The Nasdaq Capital Market was suspended on March 25, 2010, and was delisted thereafter. The Company’s stock is currently publicly traded in the OTC Marketplace under the symbol ORXE.

Basis of Presentation

The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 8-03 of Regulation S-X. The consolidated condensed balance sheet as of ~~September~~March 3031, ~~2009~~2010, consolidated condensed statements of operations for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2009~~ 2010 and ~~2008~~2009 and the consolidated condensed statements of cash flows for the ~~nine~~ three months ended ~~September 30~~March 31, ~~2009~~2010 and ~~2008~~2009 are unaudited, but include all adjustments (consisting of normal recurring adjustments) that the Company considers necessary for a fair presentation of the financial position, operating results and cash flows, respectively, for the periods presented. Although the Company believes that the disclosures in these financial statements are adequate to make the information presented not misleading, certain information and footnote information normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). All material intercompany accounts and transactions have been eliminated in consolidation.

InResults ~~2008, the~~for ~~Company~~any ~~sold~~interim ~~its~~period ~~wholly~~are ~~owned~~not ~~subsidiary,~~necessarily ~~DioGenix~~indicative ~~Inc.,~~of ~~which~~results ~~was~~for ~~its molecular~~any ~~diagnostics~~future ~~business. The~~interim ~~results~~period ofor ~~operations~~ for the ~~Company’s~~ ~~molecular~~entire ~~diagnostic~~year. The ~~business~~accompanying ~~were~~unaudited ~~not~~consolidated ~~considered~~condensed ~~material~~financial ~~and, therefore,~~statements ~~have~~should ~~not~~be ~~been~~read ~~classified~~in asconjunction awith ~~discontinued operation. There~~the ~~was~~consolidated nofinancial ~~revenue~~statements ~~from~~and notes thereto included in the Company’s ~~molecular diagnostics~~Annual ~~business~~Report on Form 10-K for the year ended December 31, 2009.

Results for any interim period are not necessarily indicative of results for any future interim period or for the entire year. The accompanying unaudited consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008.6

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Fair Value Measurements

The Company ~~adopted~~is ~~Accounting~~required ~~Standards~~to ~~Codification~~make ~~(“ASC”)~~fair ~~Topic~~value ~~820~~measurements ~~(“ASC~~in ~~820”)~~preparing the accompanying financial statements. Fair value is an exit price, ~~previously~~ ~~referred~~representing the amount that would be received to assell ~~Statement~~an ofasset ~~Financial~~or ~~Accounting~~paid ~~Standards~~to ~~(“SFAS”) No.~~transfer ~~157~~a ~~“Fair~~liability ~~Value~~in ~~Measurements”~~an ~~for~~orderly ~~financial~~transaction ~~assets~~between ~~and~~market ~~liabilities~~participants ~~on January~~at 1,the ~~2008~~measurement date. ~~The~~ ~~Company~~Accordingly, ~~adopted~~fair ~~ASC~~value ~~820~~is ~~for~~a ~~non~~market-~~financial~~based ~~assets and~~measurement ~~liabilities~~that should be determined based on ~~January~~assumptions 1,that ~~2009~~market participants would use in pricing an asset or liability. As a basis for considering such assumptions generally accepted accounting principles prescribes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

ASC 820 discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow) and the cost approach (cost to replace the service capacity of an asset or replacement cost). The statement utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

·	Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

·	Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

·	Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.

The Company’s recurring financial assets and liabilities subject to fair value measurements and the necessary disclosures are as follows:

	Fair Value
	as of		Fair Value Measurements at ~~September~~March 3031, ~~2009~~2010
	September 30,		Using Fair Value Hierarchy
	March 31,		Using Fair Value Hierarchy
	2009		Level 1		Level 2		Level 3
	2010		Level 1		Level 2		Level 3
Cash and cash equivalents	$	64,~~957~~413	$	64,~~957~~413	$	-	$	-
Marketable securities available-for-sale		68		68		-		-
Total	$	4,413	$	4,413	$	-	$	-
Total	$	7,025	$	7,025	$	-	$	-

~~Marketable securities~~The ~~available-for-sale~~amounts ~~includes~~in anthe ~~equity~~Company’s ~~investment~~Consolidated inCondensed aBalance ~~publicly-traded company~~Sheets ~~and~~for isaccounts ~~carried~~and atnotes ~~market~~receivable, ~~value~~accounts ~~based~~payable, onother ~~quoted~~current ~~market prices. Unrealized~~liabilities ~~gains~~ and ~~losses~~long-term ~~for~~debt ~~this~~approximate ~~investment~~fair ~~are~~value ~~reported as~~due ato ~~separate~~their ~~component~~short-term ~~of stockholders’ equity until realized~~nature.

~~The amounts~~There inwere ~~the~~no ~~Company’s~~required ~~Consolidated~~fair ~~Condensed~~value ~~Balance~~measurements ~~Sheets~~ for ~~notes receivable,~~non-financial ~~accounts~~assets ~~payable~~ and ~~long-term~~liabilities ~~debt~~in ~~approximate~~the ~~fair~~first ~~value~~quarter ~~due~~of ~~to their short-term nature~~2010.

There were no required fair value measurements for non-financial assets and liabilities in the third quarter of 2009.

Comprehensive Loss

The Company accounts for comprehensive loss as prescribed by ASC 220, ~~previously referred to as SFAS No. 130,~~ “~~Reporting~~ Comprehensive Income.”. Comprehensive income (loss) is the total net income (loss) , plus all changes in equity during the period, except those changes resulting from investment by and distribution to owners. Total comprehensive loss was $~~526~~1,114 and $73,~~446~~144 for the three months ended ~~September~~March 3031, ~~2009~~2010 and ~~2008, respectively, and $6,219 and $19,023 for the nine months ended September 30,~~ 2009 ~~and 2008~~, respectively.

New Accounting Pronouncements

In ~~June 2009~~February 2010, the Financial Accounting Standards Board (the “FASB”) issued anamended ~~accounting pronouncement~~guidance ~~found~~on ~~under~~subsequent ~~ASC 105, previously referred to as SFAS No~~events. Under ~~168,~~this ~~“The FASB~~amended ~~Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles~~guidance, aSEC ~~replacement~~filers ofare ~~FASB~~no ~~Statement~~longer ~~No.~~required ~~162”,~~to ~~which establishes~~disclose the ~~FASB~~date ~~Accounting~~through ~~Standards~~which ~~Codification~~subsequent asevents ~~the~~have ~~source~~been ~~of authoritative~~evaluated ~~accounting~~in ~~principles~~originally ~~recognized~~issued byand ~~the~~revised ~~FASB to be applied in the preparation of~~ financial statements ~~in conformity with GAAP~~. ~~ASC~~This ~~105 explicitly~~guidance ~~recognizes rules and interpretive releases of the SEC under federal securities laws as authoritative GAAP for SEC registrants. ASC 105~~ was effective ~~for~~immediately ~~financial statements issued for interim~~ and ~~annual reporting periods ending after September 15, 2009 (~~the ~~quarter ended September 30, 2009 for the~~ Company) ~~and~~adopted ~~did~~these ~~not~~new ~~have~~requirements anupon ~~impact~~issuance ~~on the Company's final position or results~~ of ~~operations~~this guidance.

In ~~May 2009~~January 2010, the FASB issued anupdated ~~accounting~~standards ~~pronouncement~~related ~~found~~to ~~under~~additional ~~ASC~~requirements ~~855-10, previously~~and ~~referred~~guidance toregarding asdisclosures ~~SFAS~~of ~~No.~~fair ~~165,~~value ~~“Subsequent~~measurements. The ~~Events”,~~guidance ~~which~~requires ~~establishes general~~the ~~standards~~gross presentation of ~~accounting~~activity ~~for~~within ~~and~~the ~~disclosure~~Level of3 ~~events~~fair ~~that~~value ~~occur~~measurement ~~after the~~roll-forward ~~balance~~and ~~sheet~~details ~~date,~~of ~~but~~transfers ~~before~~in ~~financial~~and ~~statements~~out ~~are~~of ~~issued~~Level or1 ~~are available~~and to2 befair ~~issued~~value measurements. ~~ASC~~In ~~855-10~~addition, iscompanies ~~effective~~will ~~for~~be ~~financial statements~~required ~~issued~~to ~~for~~disclose ~~interim~~quantitative ~~and~~information ~~annual~~about ~~reporting~~the ~~periods~~inputs ~~ending~~used ~~after~~in ~~June~~determining ~~15, 2009~~fair ~~(the~~values. These ~~quarter~~standards ~~ended~~were ~~June~~adopted ~~30,~~in ~~2009~~the ~~for~~first ~~the~~quarter ~~Company)~~of 2010. The adoption of ~~ASC~~these ~~855-10~~standards ~~did~~had ~~not~~no ~~have an~~ impact on the Company'’s financial position or results of operations as it only amends required disclosures.

7In September 2009, the FASB issued Accounting Standards Update 2009-13 (“ASU 2009-13”), “Multiple Element Arrangements”. ASU 2009-13 addresses the determination of when the individual deliverables included in a multiple arrangement may be treated as separate units of accounting. ASU 2009-13 also modifies the manner in which the transaction consideration is allocated across separately identified deliverables and establishes definitions for determining fair value of elements in an arrangement. This standard must be adopted by no later than January 1, 2011, with earlier adoption permitted. The Company is currently evaluating the impact, if any, that this standard update will have on its consolidated financial statements.

In April 2009, the FASB issued an accounting pronouncement under ASC 825-10-50 extending the disclosure requirements for financial instruments, previously referred to as FASB Staff Position (“FSP”) No. 107-1 and Accounting Principles Board Opinion No. 28-1, “Interim Disclosures about Fair Value of Financial Instruments”. ASC 825-10-50 requires disclosures in interim reporting periods and in financial statements for annual reporting periods regarding the fair value of all financial instruments for which it is practicable to estimate that value, whether recognized or not on the company's balance sheet. ASC 825-10-50 requires entities to disclose the methods and significant assumptions used to estimate the fair value of financial instruments and describe changes in methods and significant assumptions, in both interim and annual financial statements. ASC 825-10-50 is effective for interim reporting periods ending after June 15, 2009 (the quarter ended June 30, 2009 for the Company). While the adoption of ASC 825-10-50 impacts the Company's disclosures, it did not have an impact on the Company's financial position or results of operations.7

In April 2009, the FASB issued an accounting pronouncement found under ASC 320-10-65, previously referred to as FSP SFAS 115-2 and SFAS 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments,” which modifies the recognition requirements for other-than-temporary impairments of debt securities and enhances existing disclosures with respect to other-than-temporary impairments of debt and equity securities. ASC 320-10-65 is effective for interim and annual reporting periods ending after June 15, 2009 (the quarter ended June 30, 2009 for the Company). The adoption of ASC 320-10-65 had no impact on the Company’s financial position or results of operations.

In February 2008, the FASB issued a one-year deferral for non-financial assets and liabilities to comply with ASC 820, previously referred to as SFAS No. 157. The Company adopted ASC 820 for financial assets and liabilities effective January 1, 2008 (see Note 1, Fair Value Measurements). The Company adopted ASC 820 as it pertains to non-financial assets and liabilities effective January 1, 2009 and the adoption had no impact on the Company’s financial position or results of operations.

In December 2007, the FASB issued an accounting pronouncement found under ASC 805, previously referred to as SFAS No. 141 Revised, “Business Combinations”. ASC 805 requires an acquirer to determine the fair value of the consideration exchanged as of the acquisition date (i.e. the date the acquirer obtains control). Previously, an acquisition was valued as of the date the parties agreed upon the terms of the transaction. ASC 805 also modifies, among other things, the accounting for direct costs associated with an acquisition, contingencies acquired and contingent consideration. The Company adopted ASC 805 effective January 1, 2009 for business combinations occurring after the effective date.

In December 2007, the FASB ratified an accounting pronouncement found under ASC 808-10-15, previously referred to as Emerging Issues Task Force No. 07-1, “Accounting for Collaborative Agreements”. ASC 808-10-15 provides guidance regarding financial statement presentation and disclosure of collaborative arrangements, as defined therein. The Company adopted ASC 808-10-15 effective January 1, 2009 and the adoption had no impact on the Company’s financial position or results of operations.

Note 2 – Liquidity and management’s plans

Since inception, the Company has incurred, and continues to incur, significant losses from operations. At ~~September~~March 3031, ~~2009~~2010, the Company had $74,~~025~~413 in cash and cash equivalents ~~and marketable securities available-for-sale~~. The Company has realigned its corporate resources and as a result significantly reduced its workforce ~~from 71 employees on December 31, 2007~~ to 67 employees as of ~~September~~March 3031, ~~2009~~2010. In addition, the Company assigned its original Cambridge, Massachusetts lease and leased new space in Cambridge, Massachusetts at a lower cost. The Company believes that its existing cash and cash equivalents ~~and marketable securities available-for-sale~~, continuing cash savings resulting from its ongoing cash conservation efforts and proceeds from the collection of its remaining outstanding note receivable, will be sufficient to allow the Company to operate into the first quarter of 2011, including the costs ofto ~~initiating~~fund ~~and completing~~ the ongoing Phase Ib/IIa clinical trial for ORE1001, ~~which~~but assuming that the Company is ~~expected~~not required to ~~be completed~~pay more under its guarantees for two lease obligations (as discussed in ~~the~~Notes ~~third~~10 ~~quarter~~and 13 of ~~2010. However~~the Company’s Annual Report on Form 10-K for the year ended December 31, ~~there~~2009) than the Company has established as a reserve. There can be no assurance that the Company will be successful in achieving its objectives of continuing cash conservation efforts, the collection of its remaining outstanding note ~~receivable~~ orreceivable, ~~if necessary,~~ attracting additional financing, and resolution of the potential lease guarantee obligations in a manner favorable to the Company. Furthermore, ~~there~~the Company anticipates that it will likely not have sufficient resources to complete the ongoing trial for ORE1001 without further financing. There is also no assurance, if the Company completes its Phase Ib/IIa clinical trial of ORE1001, that the results will be satisfactory or will enable the Company to successfully out-license ORE1001. If the Company is not successful in achieving its objectives, although not currently anticipated, it might be necessary to substantially reduce or discontinue operations and liquidate the Company. These inconditions ~~late~~raise ~~2010~~substantial doubt about the Company’s ability to continue as a going concern. The balance sheet at ~~September~~March 3031, ~~2009~~2010 does not include any adjustments relating to recoverability and classification of recorded asset amounts or the amounts and classifications of liabilities that might be necessary in the event ofthat ~~such~~the ~~liquidation~~Company is unable to continue as a going concern.

Note 3 — Stock-based compensation

At ~~September~~ 30March 31, ~~2009~~2010, the Company has ~~the~~one ~~following~~ stock-based compensation ~~plans~~ plan: the ~~1997~~2009 Omnibus Equity Incentive Plan (~~the~~ “~~Stock~~2009 Plan”), ~~and~~which was approved by the ~~1997 Non-Employee~~stockholders ~~Directors~~at the Company’s ~~Stock~~annual ~~Option~~meeting on October 20, 2009. The 2009 Plan (replaces both of the ~~“Directors~~Company’s prior plans: the 1997 Equity Incentive Plan”) ~~(see~~and ~~Note 7)~~the 1997 Non-Employee Directors’ Stock Option Plan.

The Company recorded stock-based compensation expense ~~(benefit)~~ of $4060 and ($~~99)~~28 for the three months ended ~~September~~March 3031, ~~2009~~2010 and ~~2008~~2009, respectively~~, and $97 and $130 for the nine months ended September 30, 2009 and 2008, respectively~~. During the three months ended September 30, 2008, the stock-based compensation benefit of ($99) was due to the reversal of previously recognized expense for restricted stock awards that were forfeited, or that the Company had determined were not probable to vest.

Stock Option Awards

The Company determined the fair value of each option grant on the date of grant using the Black-Scholes option pricing model for the indicated periods, with the following assumptions:

	~~Three Months Ended~~	Three Months Ended		~~Nine Months Ended~~
	September 30,			September 30,
		March 31,
	2009		2008 (1)	2009		2008
		2010			2009
Weighted average fair value of grants	~~$0.32~~	$	-0.38	~~$0.26~~	$	$0.9721
Expected volatility	~~69%~~		-83%	~~69% to 79%~~		6179% ~~to 65%~~
Risk-free interest rate	~~2.75%~~		-2.43%	~~1.31% to 2.75%~~		21.5331% ~~to 3.04%~~
Expected lives	~~5 years~~	5 years	-	~~5 years~~	3 years	~~3 years~~
Dividend rate	0%		-0%	0%		0%
(1) No stock option awards were granted during the three months ended September 30, 2008.

The following is a summary of option activity for the ~~nine~~three months ended ~~September 30~~March 31, ~~2009~~2010:

				Per Share
				Weighted-		Aggregate
	Number of			Average		Intrinsic
	Shares			Exercise Price		Value
Outstanding at January 1, 2009		683,847		$	24.10
Outstanding at January 1, 2010		1,699,320		$	5.80
Options granted		110,~~036,100~~050		$	0.4757
Options exercised		-		$	-
Options cancelled		(~~394~~90,~~008~~200	)	$	1837.2430
Outstanding at September 30, 2009		1,325,939		$	7.37	$	201
Outstanding at March 31, 2010		1,619,170		$	4.02	$	-
Exercisable at September 30, 2009		350,348		$	26.18	$	23
Exercisable at March 31, 2010		468,344		$	12.34	$	-

The aggregate intrinsic value in the table above represents the total intrinsic value (the excess of the Company’s closing stock price on the last trading day of ~~September~~March ~~2009~~2010 over the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on ~~September~~March 3031, ~~2009~~ 2010. ~~This~~ As of March 31, 2010, none of the Company’s options were considered in-the-money, and as a result the intrinsic value was determined to be $0; however, this amount is subject to change based on changes to the fair market value of the Company’s Common Stock.

~~As of September 30, 2009, $270 of total unrecognized compensation cost related to stock option awards is expected to be recognized over a weighted-average period of 1.~~8 ~~years. This estimate does not include the impact of other possible stock-based awards that may be made during future periods.~~

As of March 31, 2010, $247 of total unrecognized compensation cost related to stock options is expected to be recognized over a weighted-average period of 1.4 years. This estimate does not include the impact of other possible stock-based awards that may be made during future periods.

Restricted Stock Awards

~~The Compensation~~There ~~Committee~~were ofno ~~the Board of Directors of the Company had previously approved grants for shares of~~ restricted stock ~~under~~awards ~~the~~outstanding ~~Stock~~as ~~Plan~~of ~~subject~~March ~~to certain performance- or time-based vesting conditions which~~31, ~~if not met, would result in forfeiture of the shares and the reversal of any previously recognized related stock-based compensation expense~~2010.

The following is a summary of restricted stock awards activity for the nine months ended September 30, 2009:

				Per Share
				Weighted-
				Average
	Number of			Grant-Date
	Shares			Fair Value
Outstanding at January 1, 2009		10,000		$	6.15
Restricted stock granted		-		$	-
Restricted stock vested		-		$	-
Restricted stock forfeited		(10,000	)	$	6.15
Outstanding at September 30, 2009		-		$	-

Performance-based non-vested restricted stock awards are recognized as compensation expense over the expected vesting period based on the fair value at the date of grant and the number of shares ultimately expected to vest.

Note 4 — Loan and grant agreements with the State of Maryland

~~During~~In ~~the second~~January ~~quarter of 2009~~2010, the Company ~~received~~reached a ~~notice~~settlement ~~requiring~~agreement with the State of Maryland concerning repayment of ~~all amounts~~the ~~potentially~~entire amount due to the lender by the Company under a loan and a grant agreement with the State of Maryland, which at the time amounted to $719, and consisted of a loan of $450 that ~~total~~was currently due upon demand, as well as repayment of a training program grant of $~~715~~111 and accrued interest of $158, both of which were included in Other Accrued Expenses at ~~September~~December 3031, 2009. ~~The~~ ~~Company~~Under ~~has recorded~~the settlement agreement, the ~~amounts~~Company ~~due~~agreed ~~under~~to repay a total of $383, of which $200 was paid in February 2010, of which $125 represents payments of the loan obligation, and $75 represents payments of the training program grant ~~agreements~~and ~~within~~accrued interest, with the ~~current portion~~remaining of$183 ~~long-term~~to ~~debt~~be ~~and~~paid ~~other~~in ~~accrued~~September ~~expenses~~2010. ~~The~~If the Company ~~is in~~does ~~discussions~~not ~~with~~repay the remaining $183 by September 30, 2010, the total amount due to the lender will revert to $719. As of March 31, 2010, the Company has continued to reflect the full amount of its liability to the State of Maryland, ~~concerning~~less the ~~terms~~payment ofmade ~~potential repayment~~in February 2010. Upon payment of ~~these~~the remaining amounts due under the settlement agreement, the Company would recognize a gain on extinguishment of $336.

Note 5 — ~~Ocimum~~Subsequent ~~Biosolutions Inc. promissory note and related agreements~~events

~~In connection~~On ~~with~~April ~~the~~14, ~~sale~~2010, of the Company’s ~~Genomics~~entered ~~business~~into ~~pursuant to~~ a ~~certain~~ ~~Asset~~Management ~~Purchase~~Services Agreement with ~~Ocimum~~p-Value ~~Biosolutions~~Capital ~~Limited~~Management, ~~as parent~~LLC, ~~and~~ ~~Ocimum~~a ~~Biosolutions~~private ~~Inc.,~~pharmaceutical aasset ~~Delaware~~management ~~corporation~~firm (“~~Ocimum~~p-Value”), as(the ~~Purchaser, which~~“Agreement”). The ~~was~~Company’s ~~completed~~Board onof ~~December~~Directors ~~14,~~anticipates ~~2007,~~that the ~~Company~~Agreement ~~had~~will ~~received~~further asreduce ~~partial payment~~costs ~~for~~to the ~~sales~~Company ~~price,~~while astill ~~$3,000~~permitting ~~secured~~the ~~promissory~~operations ~~note~~of ~~from~~the ~~Ocimum~~Company ~~and Ocimum~~to ~~Biosolutions~~continue ~~Limited,~~and ~~guaranteed~~the bypotential ~~Coramandel~~value ~~Prestcrete~~of ~~Private Limited, a company incorporated in~~ the ~~Republic~~assets of ~~India. The promissory note, secured by a security agreement between Ocimum and~~ the Company~~, was~~ ~~due~~to ~~and~~be ~~payable~~recognized onover ~~June 15, 2009~~time.

InUnder ~~June 2009~~the Agreement, the Company ~~entered~~engaged ~~into~~p-Value ato ~~superseding~~manage ~~$3,000~~the ~~secured~~operations ~~promissory~~of ~~note (“Note”)~~the ~~with~~Company ~~Ocimum~~on behalf, and ~~its~~under ~~affiliate~~the direction, ~~Ocimum~~of ~~Biosolutions~~the ~~India~~Board ~~Limited~~of Directors. The four members of p-Value consist of Mark J. Gabrielson, ~~a company~~Stephen ~~incorporated~~Donahue, inBenjamin L. Palleiko and Geoffrey Wilson. Until April 26, 2010, the ~~Republic~~four members were all employees of ~~India,~~the ~~which~~Company. The ~~was~~Agreement ~~secured~~calls ~~pursuant~~for p-Value to provide specified services to the Company in exchange for a ~~superseding~~ ~~security~~quarterly ~~agreement~~fee ~~(“Security~~and ~~Agreement”)~~certain ~~with~~incentive ~~Ocimum~~payments. The services to be provided include, among other things, management of the Company’s operations, and ~~repayment~~ overseeing and managing the Company’s intellectual property assets, ongoing litigation, and potential disposition and commercialization of ~~which~~assets ~~was~~and ~~guaranteed~~related byactivities. aThe ~~guaranty~~initial term of the agreement ~~with~~will ~~Coramandel~~be ~~Infrastructure Private~~for ~~Limited~~one year from the effective date of the Agreement, awhich ~~company~~is ~~incorporated~~April in26, 2010, and the ~~Republic~~quarterly fee to p-Value will be $275. The incentive payments will relate to the achievement of ~~India~~specified objectives as determined by the Board of Directors, and will be based, in ~~favor~~certain instances, on the amount of the proceeds received by the Company in connection with certain transactions. The ~~superseding~~Company ~~agreements~~will ~~were~~also ~~effective~~reimburse asp-Value for expenses incurred in the execution of ~~June~~its 15duties and for certain benefits provided to Messrs. Gabrielson and Wilson in 2010, ~~2009,~~ and will permit p-Value to continue to operate within the ~~original~~Company’s ~~promissory~~leased ~~note~~office space in Cambridge, ~~security~~Massachusetts. The Company has the right to terminate the agreement upon 180 days notice generally, and ~~related~~immediately ~~guarantee agreement~~upon ~~were~~certain ~~cancelled~~events, including a sale of the Company, a determination by the Board that termination is necessary in order to comply with applicable law, bankruptcy or receivership proceedings involving the Company, or a material, unremedied breach of the Agreement by p-Value. p-Value also has the right to terminate the Agreement with 180 days notice. Each of the Company and ~~terminated~~p-Value have agreed to indemnify one another, subject to certain limitations, under the Agreement.

In ~~connection~~ ~~with~~addition, ~~the~~p-Value ~~sale~~provided ofto the ~~Genomics~~Company ~~business,~~individuals who have been designated by the Company ~~had~~to ~~assigned~~fill ~~its related~~executive ~~real~~officer ~~estate~~and ~~lease~~other roles at the Company. Under the Agreement, ~~but~~Mr. ~~had~~Gabrielson ~~remained~~was ~~primarily~~appointed ~~liable~~as ~~through~~Chief ~~January 2011~~Executive inOfficer and President of the ~~event~~Company; ~~Ocimum~~Mr. ~~failed~~Palleiko towas ~~perform~~appointed ~~its~~Senior ~~obligations~~Vice ~~under~~President, Chief Financial Officer, Treasurer and Secretary of the ~~lease~~ Company; and Dr. An ~~escrow~~Donahue ~~account~~was ~~served~~appointed ~~partially~~Senior toVice ~~secure~~President, ~~Ocimum’s performance~~Clinical Development of the Company. In ~~July 2009~~addition, ~~the~~Mr. ~~landlord~~Wilson ~~agreed~~was appointed to ~~release~~the role of Director, Strategy of the Company ~~from~~. Although ~~liability~~these ~~under~~individuals have been appointed to fill the ~~lease~~designated roles, ~~and~~they have resigned as employees of the ~~escrow~~Company ~~agreement~~and ~~between~~their ~~Ocimum~~relationship and responsibilities to the Company ~~was~~are ~~terminated~~as defined in the Agreement. They will receive no compensation directly from the Company for these activities.

~~During~~In ~~the third~~conjunction ~~quarter~~with ofthe ~~2009~~Agreement, the ~~Company~~four ~~collected~~named individuals have submitted their resignations to the ~~outstanding~~Company ~~principal~~as employees of the ~~Note~~ ~~plus~~Company, ~~additional~~effective ~~amounts~~on ~~relating~~April 26, 2010, and the Board accepted their resignations. As described above, the Board appointed those individuals to ~~principal~~the ~~adjustments~~positions ~~and interest~~described above, effective April 26, 2010, in conjunction with the Agreement.

~~Note 6~~No —amount ~~Lease~~is ~~abandonment~~due to p-Value by the Company at March 31, 2010.

In the second quarter of 2009, the Company vacated substantially all of its Gaithersburg, Maryland facility and recorded a non-cash accelerated lease expense and write-down of leasehold improvements and other related assets of $749, which is included in Selling, General and Administrative expenses in the Company’s Consolidated Condensed Statements of Operations for the nine months ended September 30, 2009.9

Note 7 —6 ~~Subsequent~~- ~~events~~Litigation

On ~~October 20~~January 28 and February 1, ~~2009~~2010, the Company’s ~~stockholders~~received ~~approved~~demand letters from the landlords of the properties located at 620 and 610 Professional Drive in Gaithersburg, Maryland, respectively (the “620 Landlord” and the ~~Company~~“610 ~~completed~~Landlord,” ~~a reorganization~~respectively, ofand collectively, the ~~Company~~“Landlords”), stating that ~~was~~Bridge ~~undertaken~~Global ~~primarily~~Pharmaceutical inServices, ~~order~~Inc. (“Bridge”), which is the lessee under the leases for both properties, had appeared to ~~better protect~~have vacated the ~~value~~premises ofand had stopped paying rent on those properties and demanding that the Company pay the amounts due pursuant to the Company’s ~~approximately~~guaranties ~~$324,000~~of inBridge’s ~~gross~~obligations ~~net~~under ~~operating and~~the ~~capital~~leases. On ~~loss~~February ~~carryforwards~~9, ~~(collectively~~2010, the ~~“NOLs”)~~Company received notice of service of process informing the Company that ~~can~~the be620 ~~used~~Landlord ~~to reduce~~had filed a complaint with the ~~amount~~Circuit ofCourt ~~income~~for ~~tax~~Montgomery County, Maryland. The complaint alleges that the Company ~~could~~breached beits ~~required~~guaranty of Bridge’s obligations to pay onrent ~~future earnings~~due ~~from~~under ~~its~~the ~~business~~leases and alleges current damages of $116 plus interest and further costs and expenses. AsOn March 1, 2010, the Company received notice of a ~~result~~service of ~~this~~process ~~reorganization,~~informing ~~Ore Pharmaceuticals~~the ~~Inc.~~Company ~~became~~that athe ~~wholly~~610 ~~owned~~Landlord ~~subsidiary~~had offiled a ~~new~~complaint ~~company~~with the Circuit Court for Montgomery County, ~~Ore Pharmaceutical~~Maryland, ~~Holdings~~alleging ~~Inc.~~breach ~~(“Ore~~of ~~Holdings”)~~contract by the Company and asserting current damages in an amount to be determined. ~~All~~The Company estimates that the ~~outstanding shares~~total potential rent payable to the Landlords through the end of ~~Ore~~the ~~Pharmaceuticals~~leases, ~~Inc~~including the past due rents, is approximately $4.1 ~~were~~million. The ~~converted~~Company ~~into~~is ~~shares~~contesting ofthese ~~Ore~~claims ~~Holdings~~ vigorously and ~~Ore~~intends ~~Holdings~~to ~~then~~actively ~~became~~pursue all available avenues to hold Bridge or other affiliated entities responsible for obligations under the ~~publicly~~leases ~~traded,~~or ~~NASDAQ~~to ~~listed company. In~~otherwise ~~addition,~~recoup onamounts ~~October~~owed ~~20,~~by ~~2009~~Bridge or other affiliated entities for non-payment of rent under the leases and other costs and expenses; however, there is no assurance that the Company’s ~~stockholders approved~~will be successful in its legal defenses or in its attempts to force the ~~adoption~~appropriate ofparties to pay. The Company established a ~~new~~loss ~~stock-based~~reserve ~~compensation~~as ~~plan~~of December 31, ~~which~~2009 ~~replaced~~to account for the ~~Company’s~~ ~~Stock~~estimated ~~Plan~~potential ~~and~~costs ~~Directors’~~related ~~Plan~~to these guarantees. No changes to the loss reserves were recorded through March 31, 2010.

~~The Company evaluated all events or transactions that occurred after September 30, 2009 and through November 13, 2009, the date these financial statements were filed with the SEC.~~10

10.

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

This Quarterly Report on Form 10-Q (“Form 10-Q”) contains forward-looking statements regarding future events and the future results of Ore Pharmaceutical Holdings Inc. (“Ore Holdings”) that are based on current expectations, estimates, forecasts and projections about the industries in which Ore Holdings and its subsidiaries operate and the beliefs and assumptions of the management of Ore Holdings. Words such as “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such words, and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. Factors that might cause or contribute to such differences include those discussed in our Annual Report on Form 10-K for the year ended December 31, ~~2008~~2009 under the section entitled “Risk Factors” and in our subsequent filings with the United States Securities and Exchange Commission (“SEC”). Ore Holdings undertakes no obligation to revise or update publicly any forward-looking statements to reflect any change in management’s expectations with regard thereto or any change in events, conditions, or circumstances on which any such statements are based.

Unless the context otherwise requires, references in this Form 10-Q to “Ore,” “Ore Pharmaceuticals,” “Ore Holdings,” ~~“DioGenix,”~~ the “Company,” “we,” “us,” and “our” refer to Ore Pharmaceutical Holdings Inc., and its wholly owned subsidiary, Ore Pharmaceuticals Inc.~~, and its formerly wholly owned subsidiary, DioGenix Inc.~~

Overview

~~Ore Pharmaceutical~~We ~~Holdings~~are ~~Inc.~~focused ison adeveloping ~~pharmaceutical~~and ~~asset~~monetizing ~~management company. We~~our ~~acquire~~current ~~interests~~portfolio inof pharmaceutical assets ~~whose value~~, we ~~believe,~~which weincludes ~~can~~four ~~significantly~~clinical-stage ~~enhance~~compounds ~~through~~in-licensed ~~targeted~~from ~~development,~~major ~~with~~pharmaceutical ~~the goal~~companies. Each of ~~then monetizing~~ these ~~assets~~compounds ~~through~~has ~~sales~~been orobserved ~~out-licensing transactions. In order~~ to ~~fund~~be ~~these activities, we intend to source third~~well-~~party~~tolerated ~~financing~~in ~~using~~human ~~alternative~~clinical ~~investment~~trials ~~vehicles designed~~ to ~~align the~~date. We ~~investment~~are ~~profile~~evaluating ofour ~~each~~lead ~~program~~compound, ~~with~~ORE1001, ~~the~~as ~~interests~~a ofpotential ~~its~~treatment ~~direct investors,~~for asInflammatory ~~well~~Bowel asDisease ~~our stockholders~~(“IBD”). WeIBD ~~anticipate~~is ~~that~~a ~~designing, raising~~severe ~~and~~gastrointestinal ~~investing~~condition ~~these~~that ~~alternative~~is ~~vehicles~~estimated ~~will~~to beaffect aas ~~regular~~many ~~part~~as ofone ~~our ongoing~~million ~~activities~~people asin athe ~~company~~United States alone. We ~~believe~~initiated ~~this~~a ~~model~~Phase ofIb/IIa ~~drug development~~clinical ~~offers~~trial ~~enhanced~~in ~~capital~~patients ~~efficiency,~~with ~~shorter~~ulcerative ~~development~~colitis ~~timelines and~~– ~~better~~one ~~alignment~~ of the ~~risks~~two ~~and~~main ~~rewards~~disorders ofcomprising ~~drug~~IBD ~~development~~– ~~for~~of ~~different groups~~ORE1001 ofin ~~investors~~the ~~compared~~fourth toquarter ~~traditional~~of ~~methods~~2009.

WeIn ~~are establishing~~September a2009, ~~business~~we ~~model~~received ~~under~~notice ~~which~~from weThe ~~anticipate~~NASDAQ ~~that~~Stock ~~Ore~~Market ~~will~~(“Nasdaq”) ~~earn program~~that ~~management~~our ~~advisory~~stock ~~fees~~would ~~for~~be ~~acquiring,~~subject ~~developing~~to ~~through~~delisting ~~proof~~if ~~of concept~~we ~~and~~did ~~then~~not ~~monetizing~~regain ~~pharmaceutical~~compliance ~~assets,~~by ashaving ~~well~~a asclosing ~~retain~~bid ~~substantial economic~~price ~~interests~~equal inor ~~successful~~above ~~programs~~$1. ~~Our~~00 ~~goal~~per isshare for a minimum of 10 consecutive trading days prior to ~~create~~March ~~an investment-driven~~15, ~~investor~~2010. On ~~returns-focused~~March ~~organization~~16, ~~with~~2010, we ~~the~~were ~~appropriate corporate~~further ~~structure~~notified by Nasdaq that we had not regained compliance and ~~skill~~that ~~sets~~trading toin ~~execute~~our stock would be suspended on ~~our~~March ~~strategy~~25, 2010 in the event we did not submit an appeal to Nasdaq. ~~To this~~We ~~end,~~determined wenot ~~have~~to ~~assembled~~submit an appeal and, as a ~~management~~result, ~~team~~trading ~~with~~in ~~three~~our ~~key~~stock ~~areas~~on ofThe ~~expertise required~~Nasdaq toCapital ~~implement~~Market ~~this~~was ~~model:~~suspended ~~clinical~~on ~~development~~March 25, ~~public-~~2010, and ~~private-market~~ ~~healthcare~~was ~~finance~~delisted ~~and~~thereafter. Our ~~pharmaceutical~~stock ~~business development~~is currently publicly traded in the OTC Marketplace under the symbol ORXE.

~~Following our~~On ~~reorganization~~October ~~described~~20, ~~below~~2009, we ~~will~~completed ~~focus~~a onreorganization ~~developing~~that ~~and~~was ~~monetizing our~~undertaken ~~current~~primarily ~~portfolio,~~in ~~which~~order ~~includes~~to ~~four~~better ~~clinical-stage~~protect ~~compounds~~the value of our approximately $329 million in~~-licensed from~~ ~~major~~gross ~~pharmaceutical~~net ~~companies. Each~~operating ofand ~~these~~capital ~~compounds~~loss ~~has~~carryforwards ~~been observed~~that tocan be ~~well-tolerated~~used into ~~human~~reduce ~~clinical~~the ~~trials~~amount toof ~~date. We are~~income ~~evaluating~~tax ~~our~~we ~~lead~~could ~~compound,~~be ~~ORE1001,~~required asto apay ~~potential~~on ~~treatment~~future ~~for Inflammatory~~earnings ~~Bowel~~from ~~Disease~~our ~~(IBD)~~business. ~~IBD~~As is a ~~severe~~result ~~gastrointestinal condition~~of ~~that~~this isreorganization, ~~estimated~~Ore toPharmaceuticals ~~affect~~Inc. asbecame ~~many~~a aswholly ~~one~~owned ~~million~~subsidiary ~~people~~of ina ~~the United~~new ~~States~~company, ~~alone. We~~Ore ~~expect~~Pharmaceutical toHoldings ~~initiate~~Inc. a(“Ore ~~Phase~~Holdings”). All ~~Ib/IIa~~the ~~clinical trial~~outstanding inshares ~~patients~~of ~~with~~Ore ~~ulcerative~~Pharmaceuticals ~~colitis~~Inc. –were ~~one~~converted into shares of ~~the~~Ore ~~two~~Holdings ~~main~~and ~~disorders comprising~~Ore ~~IBD~~Holdings –then inbecame the ~~fourth~~publicly ~~quarter~~traded ofcompany ~~2009~~that we now refer to as “Ore.”

~~In September~~Our ~~2009,~~intention weat ~~received~~the ~~notice~~time ~~from~~of ~~The~~the ~~NASDAQ~~reorganization ~~Stock~~was ~~Market~~to ~~that~~explore ~~our~~and, ~~stock would~~if befeasible, ~~subject~~implement toa ~~delisting~~strategy ifby which we ~~did~~would ~~not~~finance ~~regain~~development ~~compliance~~of byour ~~having~~portfolio ~~a closing~~through ~~bid~~establishing ~~price~~alternative ~~equal~~investment toand orprogram ~~above~~development ~~$1.00~~vehicles, ~~per~~with ~~share~~Ore ~~for~~receiving aprogram ~~minimum~~management offees ~~10 consecutive~~from, ~~trading~~and ~~days~~equity ~~prior~~interests ~~to March 15~~in, ~~2010~~these vehicles. ~~While~~However, we have determined that we will ~~attempt~~ be unable to ~~regain~~execute ~~compliance,~~upon ~~there~~our ~~can~~strategy befor nothe ~~assurance~~foreseeable ~~that~~future due to the ~~bid~~potential ~~price~~financial impacts on us of ~~our~~ ~~stock~~the ~~will~~litigation ~~close~~that atis orongoing ~~above~~with ~~$1.00~~two ~~per~~landlords ~~share~~of ~~for~~facilities ~~the~~located ~~required~~in ~~time~~Gaithersburg, ~~during~~ Maryland, as well as the ~~grace~~reluctance ~~period~~of orpotential ~~that~~investors onto ~~March~~participate ~~15,~~in ~~2010,~~alternative wefinancing ~~will~~vehicles ~~meet~~managed ~~all~~by ~~applicable standards~~a ~~for~~public ~~initial~~entity. As ~~listing~~a ~~(except~~result, we proposed, and the ~~bid~~Board ~~price~~of ~~requirement)~~Directors onof ~~The~~the ~~NASDAQ Capital~~Company ~~Market~~directed, inthat ~~order~~we take actions to befurther ~~eligible~~reduce ~~for~~costs anand ~~additional~~recognize ~~180~~the ~~calendar~~value ~~day compliance~~of ~~period~~certain of our assets while we continue the litigation related to the leases.

OnAs ~~October 20,~~previously ~~2009,~~announced weand ~~completed~~as adescribed ~~reorganization~~in ofNote 5 to the ~~Company~~accompanying ~~that~~financial ~~was~~statements, ~~undertaken primarily~~we inhave ~~order~~entered tointo ~~better~~a ~~protect~~Management ~~the~~Services ~~value~~Agreement, dated as of ~~our~~April ~~approximately~~14, ~~$324~~2010, ~~million in~~by ~~gross~~and ~~net~~between ~~operating~~the Company and ~~capital~~p-Value ~~loss~~Capital ~~carryforwards~~Management, ~~(collectively~~LLC, ~~the~~a private pharmaceutical asset management firm (“~~NOLs~~p-Value”) ~~that~~ ~~can~~(the be“Agreement”). ~~used~~Our toBoard ~~reduce~~of ~~the~~Directors ~~amount~~anticipates ofthat ~~income~~the ~~tax~~Agreement wewill ~~could~~further bereduce ~~required~~costs to ~~pay on~~the ~~future~~Company ~~earnings~~while ~~from~~still ~~our~~permitting ~~business. As~~the aoperations ~~result~~ of ~~this reorganization,~~the ~~Ore~~Company ~~Pharmaceuticals~~to ~~Inc.~~continue ~~became~~and athe ~~wholly~~potential ~~owned~~value ~~subsidiary~~of the assets of ~~a new~~the ~~company,~~Company ~~Ore~~to ~~Pharmaceutical~~be ~~Holdings~~recognized ~~Inc~~over time. ~~(“Ore~~Under ~~Holdings”). All~~ the ~~outstanding~~Agreement, ~~shares~~the ofCompany ~~Ore~~has ~~Pharmaceuticals~~engaged ~~Inc.~~p-Value ~~were~~to ~~converted~~manage ~~into~~the ~~shares~~operations of ~~Ore~~ ~~Holdings~~the ~~and~~Company ~~Ore~~on ~~Holdings~~behalf, ~~then~~and ~~became~~under the ~~publicly traded~~direction, ~~NASDAQ~~of ~~listed company~~the ~~that~~Board weof ~~now refer to as “Ore”~~Directors.

We have incurred net losses in each year since our inception, including losses of $228.5 4 million in ~~2008~~2009 and $3422.75 million in ~~2007~~2008. At ~~September~~March 3031, ~~2009~~2010, we had an accumulated deficit of $~~379~~382.10 million. Our losses have resulted principally from costs incurred by both our ongoing business, as well as businesses we have sold. We expect to incur additional losses in the future.

11.

Results of Operations

Three Months Ended ~~September~~March 3031, ~~2009~~2010 and ~~2008~~2009

Revenue. We had no revenue for the three months ended ~~September~~March 3031, ~~2009~~2010 ~~compared~~and ~~to $0~~2009.2 million for the three months ended September 30, 2008. During the three months ended September 30, 2008, our revenue resulted primarily from the achievement of a milestone unrelated to our pharmaceutical asset management business.

Research and Development Expense. Research and development expenses, which now consist almost entirely of costs associated with the clinical development of ORE1001, decreased to $~~0.5~~339,000 ~~million~~ for the three months ended ~~September~~March 3031, ~~2009~~2010 from $~~2.3~~941,000 ~~million~~ for the same period in ~~2008~~2009. The decrease is primarily a result of lower ~~employee~~incurred clinical and ~~facility-related~~supplier costs; ~~due~~and tolower ~~our~~salary, ~~significant~~benefits ~~workforce reductions. For~~and ~~the~~facility-related ~~remainder~~costs ofdue ~~2009,~~to ~~we expect~~ the significant ~~decrease~~ inworkforce ~~research~~reductions ~~and~~at ~~development~~the ~~expenses~~end ~~over~~of 2008 toand ~~continue,~~the ~~primarily as~~first ahalf ~~result~~ of ~~workforce reductions~~2009.

Selling, General and Administrative Expense. Selling, general and administrative expenses, which now consist primarily of accounting, legal, human resources and other general corporate expenses, decreased to $~~1.0~~784,000 ~~million~~ for the three months ended ~~September~~March 3031, ~~2009~~ 2010 from $2.63 million for the same period in ~~2008~~2009 primarily as a result of lower employee costs, ~~due~~including toseverance-related ~~our~~outlays ~~significant~~due ~~workforce reductions and reduced professional fees relating~~ to ~~strategic~~our ~~planning. For the remainder of 2009, we expect the~~ significant ~~decrease in selling, general and administrative expenses over 2008 to continue, primarily as a result of~~ workforce reductions and reduced professional fees ~~relating to strategic planning~~.

Net Interest Income. Net interest income ~~increased~~decreased to $~~0.3~~9,000 ~~million~~ for the three months ended ~~September 30~~March 31, ~~2009~~2010 from $~~0.1~~86,000 ~~million~~ for the same period in ~~2008~~2009, due to ~~principal adjustments, which were recorded as interest income, and interest related to~~ the ~~superseding~~ ~~secured promissory note from Ocimum Biosolutions Inc. (“Ocimum”), partially offset by the~~ decline in the balance of our cash and cash equivalents ~~and~~ ~~marketable securities available-for-sale~~ and a decrease in our rates of return on investments.

(Income)/Loss on Equity Investments. During the three months ended September 30, 2009, we recorded other income of $0.6 million related to the sale of a portion of our investment in Neuralstem, Inc. (“Neuralstem”). During the three months ended September 30, 2008, we recorded a $3.0 million write-down of the remaining book value of our investment in Xceed Molecular Inc. (“Xceed”, formerly MetriGenix Corporation), due to an other-than-temporary decline in its estimated fair value.

Nine Months Ended September 30, 2009 and 2008

Revenue. We had less than $0.1 million of revenue for the nine months ended September 30, 2009 compared to $2.0 million for the nine months ended September 30, 2008. During the nine months ended September 30, 2008, our revenue resulted primarily from a licensing agreement for certain technology unrelated to our pharmaceutical asset management business.

Research and Development Expense. Research and development expenses decreased to $2.1 million for the nine months ended September 30, 2009 from $8.5 million for the same period in 2008. The decrease is primarily a result of lower employee and facility-related costs due to our significant workforce reductions.

Selling, General and Administrative Expense. Selling, general and administrative expenses decreased to $5.3 million for the nine months ended September 30, 2009 from $10.3 million for the same period in 2008 primarily as a result of lower employee costs due to our significant workforce reductions, reduced professional fees relating to strategic planning and the absence of $0.4 million of expense related to the purchase of shares from a former director that occurred in 2008, partially offset by $0.3 million in net facility-related lease abandonment costs in 2009.

Net Interest Income. Net interest income decreased to $0.5 million for the nine months ended September 30, 2009 from $0.6 million for the same period in 2008, due to the decline in the balance of our cash and cash equivalents and marketable securities available-for-sale and a decrease in our rates of return on investments, partially offset by principal adjustments, which were recorded as interest income, and interest related to the superseding secured promissory note from Ocimum.

(Income)/Loss on Equity Investments. During the nine months ended September 30, 2009, we recorded other income of $0.6 million related to the sale of a portion of our investment in Neuralstem. During the nine months ended September 30, 2008, we recorded a $3.0 million write-down of the remaining book value of our investment in Xceed, due to an other-than-temporary decline in its estimated fair value.

Liquidity and Capital Resources

Historically, we have financed our operations through the issuance and sale of equity securities, payments from customers and sales of parts of our business and assets from time to time. As of ~~September~~March 3031, ~~2009~~2010, we had approximately $74.04 million in cash and cash equivalents ~~and marketable securities available-for-sale~~, compared to $105.8 million as of December 31, ~~2008~~ 2009.

12Net cash used in operating activities decreased to $1.2 million for the three months ended March 31, 2010 from $3.6 million for the same period in 2009, primarily due to our reduced net loss for the three months ended March 31, 2010. As noted above, the reduced net loss was attributed to lower clinical and supplier costs and to lower employee and facility costs resulting from the significant workforce reductions and facility closure at the end of 2008 and into the first half of 2009.

~~Net~~For ~~cash used in operating activities decreased to a negative $7.2 million for~~ the ~~nine~~ three months ended ~~September~~March 3031, ~~2009~~2010 ~~from~~and ~~a negative $16.2 million for the same period in 2008~~2009, ~~primarily due to~~ our ~~reduced~~investing ~~net~~activities ~~loss~~were ~~for~~not ~~the nine months ended September 30, 2009~~significant.

~~For~~In ~~the nine~~2008, ~~months~~we ~~ended~~assigned ~~September~~our 30lease in Cambridge, ~~2009~~Massachusetts, ~~our~~to ~~investing~~a ~~activities~~third ~~consisted primarily~~party, ofbut we remain liable under the ~~collection~~lease ofin the $3event ~~million~~of ~~interest~~the ~~bearing~~assignee’s ~~promissory~~default. The ~~note~~ lease expires in August 2013, and at March 31, 2010, the total remaining amount due under the lease for the balance of the term is $3.9 million. In connection with the ~~2007~~2006 sale of our ~~Genomics~~Preclinical ~~business~~Division to ~~Ocimum~~Bridge Pharmaceuticals, Inc. (“Bridge”), less than $0.1 million of the sales price remains in escrow pending resolution between the parties. We continue to guarantee two leases for properties previously occupied by Bridge. The leases expire in February 2011 and December 2013 and at March 31, 2010, the total remaining amounts due under the leases for the balance of the terms is $0.6 7 million and $3.4 million, respectively. We have been named as a defendant in ~~proceeds~~two ~~from~~lawsuits brought by the ~~sale~~landlords of anthese ~~equity~~properties ~~investment~~formerly occupied by Bridge. See Part II, Item 1, “Legal Proceedings” below for more details.

~~In connection~~For the three months ended March 31, 2010, in accordance with the ~~2008~~settlement ~~sale~~agreement ofwith ~~DioGenix~~the ~~Inc.~~State toof ~~Nerveda~~Maryland, ~~Inc~~we paid the required interim payment under our loan and grant agreement from the State of Maryland. In ~~(“Nerveda”)~~January 2010, we reached a settlement agreement with the ~~balance~~ lender concerning repayment of the ~~purchase~~entire ~~price~~amount is due ~~pursuant~~to the lender by us, which at the time amounted to $719,000 and consisted of a loan of $~~0.8~~450,000 ~~million~~that ~~interest~~was ~~bearing promissory~~currently ~~note~~due upon demand, ~~with~~as ~~receipt~~well as repayment of ~~two~~a ~~principal~~training ~~payments~~program grant of $~~0.4~~111,000 ~~million~~and ~~plus~~ accrued interest ~~due~~of $158,000, both of which were included in Other Accrued Expenses at December 31, 2009. Under the settlement agreement, we agreed to repay a total of $383,000, of which $200,000 was paid in February 2010 and ~~June~~the remaining $183,000 will be paid in September 2010. If we do not repay the total $383,000 ~~subject~~by September 30, 2010, the total amount due will revert to ~~acceleration~~$719,000. As of March 31, 2010, we have continued to reflect the full amount of our liability to the State of Maryland, less the payment made in ~~certain events~~February 2010. Upon payment of the remaining amounts due under the settlement agreement, we would recognize a gain on extinguishment of $336.

InWe ~~2008~~believe that existing cash and cash equivalents and marketable securities available-for-sale, the anticipated receipt of $375, 000 relating to a promissory note from Nerveda, Inc. and our ongoing cash conservation efforts, including the subsequent settlement agreement with the State of Maryland to reduce the amount due on the outstanding loan, grant and interest, will enable us to support our operations into the first quarter of 2011, including the costs to fund the ongoing Phase Ib/IIa clinical trial for ORE1001, but assuming that we ~~assigned~~are not required to pay more under our guarantees for two lease obligations than we have established as a reserve. There can be no assurance that we will be successful in ~~Cambridge~~achieving our objectives of continuing cash conservation efforts, ~~Massachusetts~~the collection of our remaining outstanding note receivable, ~~but~~attracting ~~remain~~additional ~~liable~~financing, ~~under~~or resolution of the potential lease obligations in a manner favorable to the ~~event~~Company. Furthermore, there is no assurance if we complete our clinical trial of ORE1001, that the ~~assignee’s~~results ~~default~~will be satisfactory or will enable us to successfully out-license ORE1001. ~~The~~If ~~lease~~we ~~expires~~are not successful in ~~August~~ ~~2013~~achieving our objectives, it might be necessary to substantially reduce or discontinue our operations. We currently expect long-term support of our operations to come from possible future financings and atpayments ~~September~~from ~~30,~~commercial ~~2009,~~arrangements from our portfolio of drug candidates. These estimates are forward-looking statements that involve risks and uncertainties. Our actual future capital requirements and the ~~total~~adequacy ~~remaining~~of ~~amounts~~our ~~due~~available ~~under~~funds will depend on those factors discussed above and in the ~~lease~~ Company’s Annual Report on Form 10-K for the ~~balance~~year ofended December 31, 2009 under the ~~term~~section isentitled ~~$4.5~~“Risk ~~million~~Factors.”

In connection with the 2006 sale of our Preclinical Division to Bridge Pharmaceuticals, Inc. (“Bridge”), less than $0.1 million of the sales price remains in escrow pending resolution between the parties. We continue to guarantee two leases now held by Bridge. The leases expire in February 2011 and December 2013 and at September 30, 2009, the total remaining amounts due under the leases for the balance of the terms is $0.8 million and $3.0 million, respectively.12

Our financing activities for the nine months ended September 30, 2008 primarily consisted of the purchase of shares from a former director for $3.0 million.

In the second quarter of 2009, we received a notice requiring repayment of all amounts potentially due under a loan and a grant agreement with the State of Maryland that total $0.7 million. We have recorded the amounts due under the loan and grant agreement within current portion of long-term debt and other accrued expenses. We are in discussions with the State of Maryland concerning the terms of potential repayment of this amount.

We believe that existing cash and cash equivalents and marketable securities available-for-sale, the anticipated receipt of $0.8 million relating to the promissory note from Nerveda and our ongoing cash conservation efforts, will enable us to support our operations into the first quarter of 2011, including the costs of initiating and completing the Phase Ib/IIa clinical trial for ORE1001, which is expected to be completed in the third quarter of 2010. However, there can be no assurance that we will be successful in our continuing cash conservation efforts, the full collection of our outstanding note receivable or, if necessary, attracting additional financing. Furthermore, there is no assurance if we complete our clinical trial, that the results will be satisfactory or will enable us to successfully out-license ORE1001. If we are not successful in achieving our objectives, it might be necessary to discontinue our operations and liquidate the Company in late 2010. We currently expect long-term support of our operations to come from possible future financings and payments from commercial arrangements from our portfolio of drug candidates. These estimates are forward-looking statements that involve risks and uncertainties. Our actual future capital requirements and the adequacy of our available funds will depend on those factors discussed above and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008 under the section entitled “Risk Factors” and in our subsequent filings with the SEC.

Recently Issued Accounting Pronouncements

In ~~June 2009~~February 2010, the Financial Accounting Standards Board (the “FASB”) issued anamended ~~accounting pronouncement~~guidance ~~found~~on ~~under~~subsequent ~~Accounting~~events. Under ~~Standards~~this ~~Codification~~amended ~~(“ASC”) 105~~guidance, ~~previously~~ ~~referred~~SEC tofilers asare ~~SFAS~~no ~~No.~~longer ~~168,~~required ~~“The~~to ~~FASB~~disclose ~~Accounting Standards Codification and~~ the ~~Hierarchy~~date ofthrough ~~Generally Accepted Accounting Principles, a replacement of FASB Statement No. 162”,~~ which ~~establishes~~subsequent ~~the~~events ~~FASB~~have ~~Accounting Standards~~been ~~Codification~~evaluated ~~as the source of authoritative accounting principles recognized by the FASB to be applied~~ in ~~the~~originally ~~preparation~~issued ofand revised financial statements ~~in conformity with GAAP~~. ~~ASC~~This ~~105~~guidance ~~explicitly recognizes rules and interpretive releases of the SEC under federal securities laws as authoritative GAAP for SEC registrants. ASC 105~~ was effective ~~for~~immediately ~~financial statements issued for interim~~ and ~~annual~~we ~~reporting~~adopted ~~periods~~these ~~ending~~new ~~after September~~requirements ~~15,~~upon ~~2009~~issuance ~~(our quarter ended September 30, 2009) and did not have an impact on the our final position or results~~ of ~~operations~~this guidance.

In ~~May 2009~~January 2010, the FASB issued anupdated ~~accounting~~standards ~~pronouncement~~related ~~found~~to ~~under~~additional ~~ASC~~requirements ~~855-10, previously~~and ~~referred~~guidance toregarding asdisclosures ~~SFAS~~of ~~No.~~fair ~~165,~~value ~~“Subsequent~~measurements. The ~~Events”,~~guidance ~~which~~requires ~~establishes general~~the ~~standards~~gross presentation of ~~accounting~~activity ~~for~~within ~~and~~the ~~disclosure~~Level of3 ~~events~~fair ~~that~~value ~~occur~~measurement ~~after the~~roll-forward ~~balance~~and ~~sheet~~details ~~date,~~of ~~but~~transfers ~~before~~in ~~financial~~and ~~statements~~out ~~are~~of ~~issued~~Level or1 ~~are available~~and to2 befair ~~issued~~value measurements. ~~ASC~~In ~~855-10~~addition, iscompanies ~~effective~~will ~~for~~be ~~financial statements~~required ~~issued~~to ~~for~~disclose ~~interim~~quantitative ~~and~~information ~~annual~~about ~~reporting~~the ~~periods~~inputs ~~ending~~used ~~after~~in ~~June~~determining ~~15, 2009~~fair ~~(our~~values. These ~~quarter~~standards ~~ended~~were ~~June~~adopted ~~30,~~in ~~2009)~~the first quarter of 2010. The adoption of ~~ASC~~these ~~855-10 did~~standards ~~not~~had ~~have~~no an impact on our financial position or results of operations as it only amends required disclosures.

In ~~April~~ September 2009, the FASB issued anAccounting ~~accounting~~Standards ~~pronouncement~~Update ~~found under ASC 825~~2009-~~10-50 extending~~13 ~~the disclosure requirements for financial instruments, previously referred to as FASB Staff Position~~ (“~~FSP”)~~ASU ~~No. 107~~2009-~~1 and Accounting Principles Board Opinion No. 28-1~~13”), “~~Interim~~Multiple ~~Disclosures~~Element ~~about Fair Value of Financial Instruments~~Arrangements”. ~~ASC~~ASU ~~825~~2009-~~10-50~~13 ~~requires~~addresses ~~disclosures~~the indetermination ~~interim~~of ~~reporting periods~~when ~~and~~the inindividual ~~financial~~deliverables ~~statements~~included ~~for~~in ~~annual~~a ~~reporting~~multiple ~~periods~~arrangement ~~regarding~~may ~~the fair~~be ~~value~~treated ofas ~~all~~separate ~~financial~~units ~~instruments~~of ~~for~~accounting. ASU ~~which~~2009-13 italso ismodifies ~~practicable~~the tomanner ~~estimate that~~in ~~value,~~which ~~whether recognized or not on~~ the ~~company's~~transaction ~~balance sheet. ASC~~consideration ~~825-10-50~~is ~~requires~~allocated ~~entities~~across toseparately ~~disclose~~identified ~~the~~deliverables ~~methods~~ and ~~significant~~ ~~assumptions~~establishes ~~used~~definitions tofor ~~estimate~~determining ~~the~~ fair value of ~~financial~~elements ~~instruments and describe changes~~ in ~~methods~~an ~~and significant assumptions, in both interim and annual financial statements~~arrangement. ~~ASC~~This ~~825-10-50~~standard ismust ~~effective~~be ~~for~~adopted ~~interim reporting~~by ~~periods~~no ~~ending~~later ~~after~~than ~~June~~January 1, 152011, ~~2009~~with ~~(our~~earlier ~~quarter~~adoption ~~ended June 30, 2009)~~permitted. ~~While~~We ~~the~~are ~~adoption~~currently ofevaluating ~~ASC~~the ~~825-10-50~~impact, ~~impacts~~if ~~our disclosures~~any, it ~~did~~that ~~not~~this ~~have~~standard anupdate ~~impact~~will have on our consolidated financial ~~position or results of operations~~statements.

13.

In April 2009, the FASB issued and accounting pronouncement found under ASC 320-10-65, previously referred to as FSP SFAS 115-2 and SFAS 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments,” which modifies the recognition requirements for other-than-temporary impairments of debt securities and enhances existing disclosures with respect to other-than-temporary impairments of debt and equity securities. ASC 320-10-65 is effective for interim and annual reporting periods ending after June 15, 2009 (our quarter ended June 30, 2009). The adoption of ASC 320-10-65 had no impact on our financial position or results of operations.

In February 2008, the FASB issued a one-year deferral for non-financial assets and liabilities to comply with ASC 820, previously referred to as SFAS No. 157. We adopted ASC 820 for financial assets and liabilities effective January 1, 2008 (see Note 1, Fair Value Measurements). We adopted ASC 820 as it pertains to non-financial assets and liabilities effective January 1, 2009 and the adoption had no impact on our financial position or results of operations.

In December 2007, the FASB issued an accounting pronouncement found under ASC 805, previously referred to as SFAS No. 141 Revised, “Business Combinations”. ASC 805 requires an acquirer to determine the fair value of the consideration exchanged as of the acquisition date (i.e. the date the acquirer obtains control). Previously, an acquisition was valued as of the date the parties agreed upon the terms of the transaction. ASC 805 also modifies, among other things, the accounting for direct costs associated with an acquisition, contingencies acquired and contingent consideration. We adopted ASC 805 effective January 1, 2009 for business combinations occurring after the effective date.

In December 2007, the FASB ratified accounting pronouncement found under ASC 808-10-15, previously referred to as Emerging Issues Task Force No. 07-1, “Accounting for Collaborative Agreements.” ASC 808-10-15 provides guidance regarding financial statement presentation and disclosure of collaborative arrangements, as defined therein. We adopted ASC 808-10-15 effective January 1, 2009 and the adoption had no impact on our financial position or results of operations.

Item 4T. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our principal executive officer and principal financial officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q, have concluded that, based on such evaluation, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Our management, including the principal executive and principal financial officers, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all errors and all instances of fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based, in part, on 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. Projections of any evaluation of the effectiveness of controls to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal ~~controls~~control over financial reporting during the ~~third~~ first quarter of ~~2009~~2010 that materially affected or are reasonably likely to materially affect our internal ~~controls~~control over financial reporting.

~~14.~~13

PART II OTHER INFORMATION

Item 1. Legal Proceedings

On January 28 and February 1, 2010, we received demand letters from the landlords of the properties located at 620 and 610 Professional Drive in Gaithersburg, Maryland, respectively (the “620 Landlord” and the “610 Landlord,” respectively, and collectively the “Landlords”), stating that Bridge Global Pharmaceutical Services, Inc. (“Bridge”), which is the lessee under the leases for both properties, had appeared to have vacated the premises and had stopped paying rent on those properties and demanding that we pay the amounts due pursuant to our guaranties of Bridge’s obligations under the leases. On February 9, 2010, we received notice of service of process informing us that the 620 Landlord had filed a complaint with the Circuit Court for Montgomery County, Maryland. The complaint alleges that we breached our guaranty of Bridge’s obligations to pay rent due under the leases and alleges current damages of $116,497.69 plus interest and further costs and expenses. On March 1, 2010, we received notice of service of process informing us that the 610 Landlord had filed a complaint with the Circuit Court for Montgomery County, Maryland, alleging breach of contract by us and asserting current damages in an amount to be determined. We estimate that the total potential rent payable to the Landlords through the end of the leases, including the past due rents, is approximately $4.1 million. We are ~~not currently~~contesting athese ~~party~~claims vigorously and intend to ~~any~~actively ~~material~~pursue all available avenues to hold Bridge or other affiliated entities responsible for obligations under the leases or to otherwise recoup amounts owed by Bridge or other affiliated entities for non-payment of rent under the leases and other costs and expenses; however, there is no assurance that we will be successful in our legal ~~proceedings~~defenses or in our attempts to force the appropriate parties to pay. We established a loss reserve as of December 31, 2009 to account for the estimated potential costs related to these guarantees. No changes to the loss reserves were recorded through March 31, 2010.

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

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. ~~Submission of~~ (Removed ~~Matters~~and ~~to a Vote of Security Holders~~Reserved)

None.

Item 5. Other Information

On October 20, 2009, at the annual meeting of stockholders (“Annual Meeting”), the stockholders approved the 2009 Omnibus Equity Incentive Plan (“2009 Plan”), under which 2,224,092 shares of Common Stock have been reserved for issuance, including 700,000 shares newly authorized at the Annual Meeting and 1,524,092 shares related to the 1997 Equity Incentive Plan and 1997 Non-Employee Directors’ Plan (the “Prior Plans”). The 2009 Plan replaces the Prior Plans, which were terminated upon the stockholders approval of the 2009 Plan.None

Item 6. Exhibits

	3.1	Certificate of Incorporation of Ore Pharmaceutical Holdings Inc.
Exhibit Number	Exhibit Description	Filed with this Report	Incorporated by Reference herein from Form or Schedule	Filing Date	SEC File / Registration Number
	3.2	Bylaws of Ore Pharmaceutical Holdings Inc. (1)
31.1	Certification of Principal Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002.	X
	*10.92c	2009 Performance Year Incentive Compensation Plan.
31.2	Certification of Principal Accounting and Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002.	X
	*10.114	Letter Agreement, dated July 15, 2009, from Ore Pharmaceuticals Inc. to Benjamin L. Palleiko. (2)
32	Certification of the Principal Executive Officer and the Principal Accounting and Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002.	X
	10.115	Release of Further Performance Under Lease, effective July 31, 2009, between 50 West Watkins Mill Road, LLC and Ore Pharmaceuticals Inc. (3)
	*10.118	Consulting Agreement between Ore Pharmaceuticals Inc. and Mark D. Gessler, effective July 23, 2009.
	31	Certifications pursuant to Rule 13a-14(a)/15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
	32	Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

* indicates management compensatory plan, contract or arrangement.14

(1) Filed as Appendix C to the Registrant’s Registration Statement on Form S-4/A, filed on September 2, 2009 (Registration No. 333-161363), and incorporated herein by reference.

(2) Filed as Exhibit 10.114 to Ore Pharmaceuticals Inc.’s Current Report on Form 8-K, filed on July 21, 2009 (File No. 0-23317), and incorporated herein by reference.

(3) Filed as Exhibit 10.115 to Ore Pharmaceuticals Inc.’s Current Report on Form 8-K, filed on August 6, 2009 (File No. 0-23317), and incorporated herein by reference.

15.

SIGNATURES

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.

	~~ORE PHARMACEUTICAL HOLDINGS INC.~~	ORE PHARMACEUTICAL HOLDINGS INC.
Date: November 13, 2009		By:	/s/ Benjamin L. Palleiko
Date:	May 11, 2010		By:	/s/	Benjamin L. Palleiko
			~~Benjamin L. Palleiko~~		Benjamin L. Palleiko
			Senior Vice President and Chief Financial Officer
					Senior Vice President and
			(Principal Financial and Accounting Officer)
					Chief Financial Officer
					(Principal Financial and Accounting Officer)

~~16.~~15

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