424B1: Prospectus filed pursuant to Rule 424(b)(1)

Filed pursuant to Rule 424 (b) (1)
Registration No. 333-113909


2,393,196 SHARES

[LOGO]

Access Pharmaceuticals, Inc.

COMMON STOCK

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PROSPECTUS
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April 7, 2004


PROSPECTUS

Access Pharmaceuticals, Inc.

Subject to completion, April 7, 2004.

2,393,196 Shares of
Common Stock, $.01 par value per share

This prospectus relates to the sale by certain stockholders of ours, the
Selling Stockholders, of up to 2,393,196 shares of our common stock,
including 603,825 shares issuable upon the exercise of warrants. If the
warrants are exercised, we will receive the proceeds from such exercise
if payment is made in cash.

On April 7, 2004, the last sale price of our Common Stock was $7.43
per share, as reported by the American Stock Exchange, or AMEX, under
the symbol AKC.

Investing in the common stock involves risks. For a discussion of certain
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factors you should consider, see "Risk Factors" beginning on Page 2.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined
if this prospectus is truthful or complete. Any representation to the
contrary is a criminal offense.

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The date of this prospectus is April 7, 2004

Table of Contents


Page
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Access Pharmaceuticals, Inc. 2

Risk Factors 2

Forward Looking Statements 11

Use of Proceeds 12

Selling Stockholders 12

Plan of Distribution 13

Legal Matters 15

Experts 15

Where You Can Get More Information 15

Certain Information We Are Incorporating By Reference 16

2

ACCESS PHARMACEUTICALS, INC.

General
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Access Pharmaceuticals is an emerging pharmaceutical company. We are
focused on developing both novel low development risk product candidates
and technologies with longer-term major product opportunities.

We were founded in Wyoming in 1974 as Chemex Corporation, and in
1983 we changed our name to Chemex Pharmaceuticals, Inc. We changed
our state of incorporation from Wyoming to Delaware on June 30, 1989.
In 1996 we merged with Access Pharmaceuticals, Inc., a private Texas
corporation, and changed our name to Access Pharmaceuticals, Inc. Our
principal executive office is located at 2600 Stemmons Freeway, Suite
176, Dallas, Texas 75207; our telephone number is (214) 905-5100.

Products
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Milestone Payments And Royalties By Product
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The following table reflects aggregate milestone payments received to
December 31, 2003, aggregate possible milestone payments under
agreements signed as of December 31, 2003 and royalties received to
December 31, 2003.



Milestones Royalties
Received to Aggregate Possible Received to
Product 12/31/03 Milestones 12/31/03
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Aphthasol(R) $ 752,000 $ 6,171,000 $ -
Zindaclin(R) $ 1,335,000 $ 897,000 $ 46,000

RISK FACTORS

This offering involves a high degree of risk. You should carefully
consider the risks described below and the other information in this
prospectus before purchasing our common stock.

We have experienced a history of losses and we expect to incur future losses.
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We have recorded minimal revenue to date and we have incurred a
cumulative operating loss of approximately $54.0 million through
December 31, 2003. Losses for the years ended 2003, 2002 and 2001
were $6,735,000, $9,384,000 and $6,027,000, respectively. Our losses
have resulted principally from costs incurred in research and development
activities related to our efforts to develop clinical candidates and from the
associated administrative costs. We expect to incur significant additional
operating losses over the next several years. We also expect cumulative
losses to increase due to expanded research and development efforts and
preclinical and clinical trials. Our net cash burn rate for the twelve months
of 2003 was $601,000 per month. We project our net cash burn rate for
the next twelve months to be approximately $400,000 per month. Capital
expenditures are forecasted to be minor for the next twelve months since
most of our new equipment is leased and the lease expense is included in
the calculation of the net cash burn rate.

We do not have significant operating revenue and we may never attain
profitability.
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To date, we have funded our operations primarily through private sales of
common stock and convertible notes. Contract research payments and
licensing fees from corporate alliances and mergers have also provided
funding for our operations. Our ability to achieve significant revenue or
profitability depends upon our ability to successfully complete the
development of drug candidates, to develop and obtain patent protection
and regulatory approvals for our drug candidates and to manufacture and
commercialize the resulting drugs. We have not received significant
royalties for sales of amlexanox or Zindaclin(R) products

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to date and we may not generate significant revenues or profits
from the sale of these products in the future. Furthermore,
we may not be able to ever successfully identify,
develop, commercialize, patent, manufacture, obtain
required regulatory approvals and market any additional products.
Moreover, even if we do identify, develop, commercialize, patent,
manufacture, and obtain required regulatory approvals to market additional
products, we may not generate revenues or royalties from commercial
sales of these products for a significant number of years, if at all.
Therefore, our proposed operations are subject to all the risks inherent in
the establishment of a new business enterprise. In the next few years, our
revenues may be limited to minimal royalties, any amounts that we
receive under strategic partnerships and research or drug development
collaborations that we may establish and, as a result, we may be unable
to achieve or maintain profitability in the future or to achieve significant
revenues in order to fund our operations.

We may not successfully commercialize our drug candidates.
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Our drug candidates are subject to the risks of failure inherent in the
development of pharmaceutical products based on new technologies and
our failure to develop safe, commercially viable drugs would severely
limit our ability to become profitable or to achieve significant revenues.
We may be unable to successfully commercialize our drug candidates
because:

* some or all of our drug candidates may be found to be unsafe or
ineffective or otherwise fail to meet applicable regulatory standards or
receive necessary regulatory clearances;

* our drug candidates, if safe and effective, may be too difficult to
develop into commercially viable drugs;

* it may be difficult to manufacture or market our drug candidates on a
large scale;

* proprietary rights of third parties may preclude us from marketing our
drug candidates; and

* third parties may market superior or equivalent drugs.

The success of our research and development activities, upon which we
primarily focus, is uncertain.
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Our primary focus is on our research and development activities and the
commercialization of compounds covered by proprietary biopharmaceutical
patents and patent applications. Research and development activities, by
their nature, preclude definitive statements as to the time required and
costs involved in reaching certain objectives. Actual research and
development costs, therefore, could exceed budgeted amounts and
estimated time frames may require extension. Cost overruns, unanticipated
regulatory delays or demands, unexpected adverse side effects or
insufficient therapeutic efficacy will prevent or substantially slow our
research and development effort and our business could ultimately suffer.
We anticipate that we will remain principally engaged in research and
development activities for an indeterminate, but substantial, period of
time.

We may be unable to obtain necessary additional capital to fund operations
in the future.
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We require substantial capital for our development programs and operating
expenses, to pursue regulatory clearances and to prosecute and defend our
intellectual property rights. Although we believe that our existing capital
resources, interest income, product sales, royalties and revenue from
possible licensing agreements and collaborative agreements will be
sufficient to fund our currently expected operating expenses and capital
requirements through 2005, we may need to raise substantial additional
capital during that period to support our ongoing operations because our
actual cash requirements may vary materially from those now planned and
will depend upon numerous factors, including :

* the sales levels of our currently marketed products;
* the results of our research and development programs;
* the timing and results of preclinical and clinical trials;
* our ability to maintain existing and establish new collaborative
agreements with other companies to provide funding to us;
* technological advances; and

4

* activities of competitors and other factors.

If we do raise additional funds by issuing equity securities, further dilution
to existing stockholders would result and future investors may be granted
rights superior to those of existing stockholders. If adequate funds are not
available to us through additional equity offerings, we may be required to
delay, reduce the scope of or eliminate one or more of our research and
development programs or to obtain funds by entering into arrangements
with collaborative partners or others that require us to issue additional
equity securities or to relinquish rights to certain technologies or drug
candidates that we would not otherwise issue or relinquish in order to
continue independent operations.

We may be unable to successfully develop, market, or commercialize our
products or our product candidates without establishing new relationships
and maintaining current relationships.
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Our strategy for the research, development and commercialization of our
potential pharmaceutical products may require us to enter into various
arrangements with corporate and academic collaborators, licensors,
licensees and others, in addition to our existing relationships with other
parties. Specifically, if we successfully develop any commercially
marketable pharmaceutical products, we may seek to enter joint venture,
sublicense or other marketing arrangements with parties that have an
established marketing capability or we may choose to pursue the
commercialization of such products on our own. We may, however, be
unable to establish such additional collaborative arrangements, license
agreements, or marketing agreements as we may deem necessary to
develop, commercialize and market our potential pharmaceutical products
on acceptable terms. Furthermore, if we maintain and establish
arrangements or relationships with third parties, our business may depend
upon the successful performance by these third parties of their
responsibilities under those arrangements and relationships. For our
commercialized products we currently rely upon the following
relationships in the following marketing territories:

* amlexanox 5% paste
o Strakan Ltd. - United Kingdom and Ireland manufacturing and
marketing rights
o Zambon Group - France, Germany, Holland, Belgium, Luxembourg,
Switzerland, Brazil, Colombia and Italy manufacturing and marketing
rights
o Laboratories Dr. Esteve SA - Spain, Portugal and Greece
manufacturing and marketing rights
o Meda, AB for Scandinavia, the Baltic states and Iceland marketing
rights
o Mipharm SpA for Italy manufacturing and marketing rights
o Paladin Labs, Inc. for Canada manufacturing and marketing rights

* Zindaclin(R) and Residerm(R)
o Strakan Ltd. - worldwide manufacturing and marketing rights
o Fujisawa GmbH - sublicensed continental Europe marketing rights
o Taro - sublicensed Israel marketing rights
o Various companies for other smaller countries - sublicensed marketing
rights

Our ability to successfully commercialize, and market our products and
product candidates could be limited if a number of these existing
relationships were terminated.

Furthermore, our strategy with respect to our polymer platinate program
is to enter into a licensing agreement with a pharmaceutical company
pursuant to which the further costs of developing a product would be
shared with our licensing partner. Although we have had discussions with
potential licensing partners with respect to our polymer platinate program,
to date we have not entered into any licensing arrangement. We may be
unable to execute our licensing strategy for polymer platinate.

We may be unable to successfully manufacture our products and our
product candidates in clinical quantities or for commercial purposes
without the assistance of contract manufacturers, which may be difficult
for us to obtain and maintain.
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5

We have limited experience in the manufacture of pharmaceutical products
in clinical quantities or for commercial purposes and we may not be able
to manufacture any new pharmaceutical products that we may develop. As
a result, we have established, and in the future intend to establish
arrangements with contract manufacturers to supply sufficient quantities
of products to conduct clinical trials and for the manufacture, packaging,
labeling and distribution of finished pharmaceutical products if any of our
potential products are approved for commercialization. If we are unable
to contract for a sufficient supply of our potential pharmaceutical products
on acceptable terms, our preclinical and human clinical testing schedule
may be delayed, resulting in the delay of our submission of products for
regulatory approval and initiation of new development programs, which
could cause our business to suffer. Delays or difficulties in establishing
relationships with manufacturers to produce, package, label and distribute
our finished pharmaceutical or other medical products, if any, market
introduction and subsequent sales of such products could cause our
business to suffer. Moreover, contract manufacturers that we may use
must adhere to current Good Manufacturing Practices, as required by the
FDA. In this regard, the FDA will not issue a pre-market approval or
product and establishment licenses, where applicable, to a manufacturing
facility for the products until after the manufacturing facility passes a pre-
approval plant inspection. If we are unable to obtain or retain third party
manufacturing on commercially acceptable terms, we may not be able to
commercialize our products as planned. Our potential dependence upon
third parties for the manufacture of our products may adversely affect our
profit margins and our ability to develop and deliver such products on a
timely and competitive basis.

Our amlexanox 5% paste is marketed in the US as Aphthasol(R). Block
Drug Company had manufactured the 5% amlexanox paste since the
product was approved by the FDA in 1996 in a Puerto Rico facility
certified by the FDA for Good Manufacturing Practices. At such time
when we acquired the US rights to Aphthasol(R) we entered into a Supply
Agreement whereby Block Drug Company was to produce Aphthasol(R) for
us for a defined period of time at its Puerto Rico facility. We were
subsequently advised by Block Drug Company that it was unable to
comply with the terms of the Supply Agreement and that it would not be
able to produce Aphthasol(R) for us. Due to Block Drug Company's
production failure, we had sufficient product to supply wholesalers only
through June 2003. We do not anticipate further sales of the product until
the second quarter of 2004. We acquired the rights to amlexanox 5% paste
from Block Drug Company on July 22, 2002. We have selected Contract
Pharmaceuticals Ltd. Canada as our new manufacturer of amlexanox 5%
paste and it has produced initial qualifying batches of the product. Full
scale production commenced in the first quarter of 2004.

Amlexanox 5% paste was approved by regulatory authorities for sale in
the UK and is currently in the approval process in the remaining EU
countries. We licensed manufacturing rights to Strakan, Zambon, Esteve
and Mipharm for specific countries in Europe. Contract Pharmaceuticals
Ltd. Canada has also been selected as our European supplier of amlexanox
5% paste and a UK filing has been made to approve this facility for
European supply.

We licensed our patents for worldwide manufacturing and marketing for
Zindaclin(R) and the ResiDerm(R) technology to Strakan Ltd. for the
period of the patents. We receive a royalty on the sales of the product.
Strakan has a contract manufacturer for Zindaclin(R) in a European Union
approved facility. Zindaclin(R) was approved in the UK and seven
additional European Union countries and is currently under review for
approval in the remaining EU countries.

OraDisc(TM) was manufactured by a third party for our Phase III clinical
trials. Enough product was manufactured to cover the needs of the clinical
trials and testing. We finalized with a third party a contract for
manufacturing our product if our product gains regulatory approval.

AP5280 and AP5346 are manufactured by a third parties for our Phase
I/II clinical trials. Manufacturing is ongoing for the current clinical trials.
Certain manufacturing steps are conducted by the Company to enable
significant cost savings to be realized.

Our mucoadhesive technology is manufactured by a third party for our
clinical trials.

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We are subject to extensive governmental regulation which increases our
cost of doing business and may affect our ability to commercialize any
new products that we may develop.
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The FDA and comparable agencies in foreign countries impose substantial
requirements upon the introduction of pharmaceutical products through
lengthy and detailed laboratory, preclinical and clinical testing procedures
and other costly and time-consuming procedures to establish their safety
and efficacy. All of our drug candidates require governmental approvals
for commercialization. Preclinical and clinical trials and manufacturing of
our drug candidates will be subject to the rigorous testing and approval
processes of the FDA and corresponding foreign regulatory authorities.
Satisfaction of these requirements typically takes a significant number of
years and can vary substantially based upon the type, complexity and
novelty of the product. The status of our principal products is as follows:

* 5% amlexanox paste is an approved product for sale in the US
(Aphthasol(R)); approved in the UK and Canada but not yet sold; and, in
the approval process in the EU.
* Zindaclin(R) is an approved product for sale in the UK and seven
additional European Union countries; in the approval process in the
remaining EU countries; and waiting for finalized plans and approval to
start a Phase III trial in the US.
* OraDisc(TM) has completed a Phase III clinical trial in the US and we
filed an NDA.
* AP5280 has completed Phase I of its Phase I/II trial in Europe and we
are analyzing the results to start the Phase II part of the trial.
* AP5346 is currently in a Phase I trial in Europe.
* Mucoadhesive liquid technology is planned to start a Phase III trial in
the US in the second quarter of 2004.
* Vitamin mediated delivery technology is currently in the pre-clinical
phase.
* We also have other products in the preclinical phase.

Due to the time consuming and uncertain nature of the drug candidate
development process and the governmental approval process described
above, we cannot assure you when we, independently or with our
collaborative partners, might submit a New Drug Application, or "NDA",
for FDA or other regulatory review.

Government regulation also affects the manufacturing and marketing of
pharmaceutical products. Government regulations may delay marketing of
our potential drugs for a considerable or indefinite period of time, impose
costly procedural requirements upon our activities and furnish a
competitive advantage to larger companies or companies more experienced
in regulatory affairs. Delays in obtaining governmental regulatory
approval could adversely affect our marketing as well as our ability to
generate significant revenues from commercial sales. Our drug candidates
may not receive FDA or other regulatory approvals on a timely basis or
at all. Moreover, if regulatory approval of a drug candidate is granted,
such approval may impose limitations on the indicated use for which such
drug may be marketed. Even if we obtain initial regulatory approvals for
our drug candidates, Access, and our drugs and our manufacturing
facilities would be subject to continual review and periodic inspection, and
later discovery of previously unknown problems with a drug,
manufacturer or facility may result in restrictions on the marketing or
manufacture of such drug, including withdrawal of the drug from the
market. The FDA and other regulatory authorities stringently apply
regulatory standards and failure to comply with regulatory standards can,
among other things, result in fines, denial or withdrawal of regulatory
approvals, product recalls or seizures, operating restrictions and criminal
prosecution.

The uncertainty associated with preclinical and clinical testing may affect
our ability to successfully commercialize new products.
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Before we can obtain regulatory approvals for the commercial sale of any
of our potential drugs, the drug candidates will be subject to extensive
preclinical and clinical trials to demonstrate their safety and efficacy in
humans. Preclinical or clinical trials of any of our future drug candidates
may not demonstrate the safety and efficacy of such drug candidates at all
or to the extent necessary to obtain regulatory

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approvals. In this regard, for example, adverse side effects
can occur during the clinical testing of
a new drug on humans which may delay ultimate FDA approval or even
lead us to terminate our efforts to develop the drug for commercial use.
Companies in the biotechnology industry have suffered significant setbacks
in advanced clinical trials, even after demonstrating promising results in
earlier trials. In particular, OraDisc(TM) and AP5280 have taken longer
to progress through clinical trials than originally planned. This extra time
has not been related to concerns of the formulations but rather due to the
lengthy regulatory process. The failure to adequately demonstrate the
safety and efficacy of a drug candidate under development could delay or
prevent regulatory approval of the drug candidate. A delay or failure to
receive regulatory approval for any of our drug candidates could prevent
us from successfully commercializing such candidates and we could incur
substantial additional expenses in our attempts to further develop such
candidates and obtain future regulatory approval.

We may incur substantial product liability expenses due to the use or
misuse of our products for which we may be unable to obtain insurance
coverage.
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Our business exposes us to potential liability risks that are inherent in the
testing, manufacturing and marketing of pharmaceutical products. These
risks will expand with respect to our drug candidates, if any, that receive
regulatory approval for commercial sale and we may face substantial
liability for damages in the event of adverse side effects or product defects
identified with any of our products that are used in clinical tests or
marketed to the public. We generally procure product liability insurance
for drug candidates that are undergoing human clinical trials. Product
liability insurance for the biotechnology industry is generally expensive,
if available at all, and as a result, we may be unable to obtain insurance
coverage at acceptable costs or in a sufficient amount in the future, if at
all. We may be unable to satisfy any claims for which we may be held
liable as a result of the use or misuse of products which we have
developed, manufactured or sold and any such product liability claim
could adversely affect our business, operating results or financial
condition.

We may incur significant liabilities if we fail to comply with stringent
environmental regulations or if we did not comply with these regulations
in the past.
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Our research and development processes involve the controlled use of
hazardous materials. We are subject to a variety of federal, state and local
governmental laws and regulations related to the use, manufacture,
storage, handling and disposal of such material and certain waste products.
Although we believe that our activities and our safety procedures for
storing, using, handling and disposing of such materials comply with the
standards prescribed by such laws and regulations, the risk of accidental
contamination or injury from these materials cannot be completely
eliminated. In the event of such accident, we could be held liable for any
damages that result and any such liability could exceed our resources.

Intense competition may limit our ability to successfully develop and
market commercial products.
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The biotechnology and pharmaceutical industries are intensely competitive
and subject to rapid and significant technological change. Our competitors
in the United States and elsewhere are numerous and include, among
others, major multinational pharmaceutical and chemical companies,
specialized biotechnology firms and universities and other research
institutions.

The following products may compete with polymer platinum (AP5280)
and DACH platinum (AP5346):

* Cisplatin, marketed by Bristol-Myers-Squibb, the originator of the drug,
and several generic manufacturers;
* Carboplatin, marketed exclusively by Bristol-Myers-Squibb; and
* Oxaliplatin, marketed exclusively by Sanofi-Synthelabo.

The following companies are working on therapies and formulations that
may be competitive with our polymer platinum (AP5280) and DACH
platinum (AP5346):

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* Antigenics is developing liposomal formulations; and
* Cell Therapeutics, Daiichi, Enzon and Inhale are developing alternate
drugs in combination with polymers.

The following products may compete with our Residerm(R) products:

* Benzamycin, marketed by a subsidiary of Aventis;
* Cleocin-T and a generic topical clindamycin, marketed by Pharmacia;
* Benzac, marketed by a subsidiary of L'Oreal; and
* Triaz, marketed by Medicis Pharmaceutical Corp.

Technology and prescription steroids such as Kenalog in OraBase,
developed by Bristol-Myers Squibb, may compete with our
commercialized Aphthasol(R) product. OTC products including Orajel - Del
Laboratories and Anbesol - Wyeth Consumer Healthcare also compete in
the aphthous ulcer market.

Companies working on therapies and formulations that may be competitive
with our vitamin mediated drug delivery system are Bristol-Myers-Squibb,
Centocor (acquired by Johnson & Johnson), GlaxoSmithKline, Imclone
and Xoma which are developing targeted monoclonal antibody therapy.

RxKinetics, Human Genome Sciences, Endo Pharmaceuticals and Amgen
are developing products to treat mucositis that may compete with the
mucoadhesive liquid technology.

Emisphere Technologies, Inc., Biovail Corporation, CIMA Labs, Inc.,
Depomed Inc. and Flamel Technologies are developing products which
compete with our oral drug delivery system.

Many of these competitors have and employ greater financial and other
resources, including larger research and development staffs and more
effective marketing and manufacturing organizations, than us or our
collaborative partners. As a result, our competitors may successfully
develop technologies and drugs that are more effective or less costly than
any that we are developing or which would render our technology and
future products obsolete and noncompetitive.

In addition, some of our competitors have greater experience than we do
in conducting preclinical and clinical trials and obtaining FDA and other
regulatory approvals. Accordingly, our competitors may succeed in
obtaining FDA or other regulatory approvals for drug candidates more
rapidly than we do. Companies that complete clinical trials, obtain
required regulatory agency approvals and commence commercial sale of
their drugs before their competitors may achieve a significant competitive
advantage. Drugs resulting from our research and development efforts or
from our joint efforts with collaborative partners therefore may not be
commercially competitive with our competitors' existing products or
products under development.

Our ability to successfully develop and commercialize our drug candidates
will substantially depend upon the availability of reimbursement funds for
the costs of the resulting drugs and related treatments.
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The successful commercialization of, and the interest of potential
collaborative partners to invest in, the development of our drug candidates
will depend substantially upon reimbursement of the costs of the resulting
drugs and related treatments at acceptable levels from government
authorities, private health insurers and other organizations, including
health maintenance organizations, or HMOs. To date, the costs of our
marketed products Aphthasol(R) and Zindaclin(R) generally have been
reimbursed at acceptable levels, however, the amount of such
reimbursement in the United States or elsewhere may be decreased in the
future or may be unavailable for any drugs that we may develop in the
future. Limited reimbursement for the cost of any drugs that we develop
may reduce the demand for, or price of such drugs, which would hamper
our ability to obtain collaborative partners to commercialize our drugs, or
to obtain a sufficient financial return on our own manufacture and
commercialization of any future drugs.

9

The market may not accept any pharmaceutical products that we
successfully develop.
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The drugs that we are attempting to develop may compete with a number
of well-established drugs manufactured and marketed by major
pharmaceutical companies. The degree of market acceptance of any drugs
developed by us will depend on a number of factors, including the
establishment and demonstration of the clinical efficacy and safety of our
drug candidates, the potential advantage of our drug candidates over
existing therapies and the reimbursement policies of government and third-
party payers. Physicians, patients or the medical community in general
may not accept or use any drugs that we may develop independently or
with our collaborative partners and if they do not, our business could
suffer.

In 1996, the 5% amlexanox paste product was approved for sale in the
United States. To date, the product is not widely accepted in the
marketplace and its sales have not been significant. On July 22, 2002, we
acquired the rights to it from Block Drug Company and we intend to re-
launch it in the second quarter of 2004. The product has been approved
in the UK and Canada but has not been launched in any markets other
than the United States.

Trends toward managed health care and downward price pressures on
medical products and services may limit our ability to profitably sell any
drugs that we may develop.
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Lower prices for pharmaceutical products may result from:

* third-party payers' increasing challenges to the prices charged for
medical products and services;
* the trend toward managed health care in the United States and the
concurrent growth of HMOs and similar organizations that can control or
significantly influence the purchase of healthcare services and products;
and
* legislative proposals to reform healthcare or reduce government
insurance programs.

The cost containment measures that healthcare providers are instituting,
including practice protocols and guidelines and clinical pathways, and the
effect of any health care reform, could limit our ability to profitably sell
any drugs that we may successfully develop. Moreover, any future
legislation or regulation, if any, relating to the healthcare industry or
third-party coverage and reimbursement, may cause our business to suffer.

We may not be successful in protecting our intellectual property and
proprietary rights.
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Our success depends, in part, on our ability to obtain U.S. and foreign
patent protection for our drug candidates and processes, preserve our trade
secrets and operate our business without infringing the proprietary rights
of third parties. Legal standards relating to the validity of patents covering
pharmaceutical and biotechnological inventions and the scope of claims
made under such patents are still developing and there is no consistent
policy regarding the breadth of claims allowed in biotechnology patents.
The patent position of a biotechnology firm is highly uncertain and
involves complex legal and factual questions. We cannot assure you that
any existing or future patents issued to, or licensed by, us will not
subsequently be challenged, infringed upon, invalidated or circumvented
by others. As a result, although we, together with our subsidiaries, are
either the owner or licensee of technology to 26 U.S. patents and to 16
U.S. patent applications now pending, and 7 European patents and 17
European patent applications, we cannot assure you that any additional
patents will issue from any of the patent applications owned by, or
licensed to, us. Furthermore, any rights that we may have under issued
patents may not provide us with significant protection against competitive
products or otherwise be commercially viable.

Our patents for the following technologies expire in the years and during
the date ranges indicated below:

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* 5% amlexanox paste in 2011
* Zindaclin(R) and Residerm(R) between 2007 and 2011
* OraDisc(TM) in 2020
* AP5280 in 2021
* AP5346 in 2021
* Mucoadhesive technology, patents are pending
* Vitamin mediated technology between 2003 and 2019

In addition, patents may have been granted to third parties or may be
granted covering products or processes that are necessary or useful to the
development of our drug candidates. If our drug candidates or processes
are found to infringe upon the patents or otherwise impermissibly utilize
the intellectual property of others, our development, manufacture and sale
of such drug candidates could be severely restricted or prohibited. In such
event, we may be required to obtain licenses from third parties to utilize
the patents or proprietary rights of others. We cannot assure you that we
will be able to obtain such licenses on acceptable terms, if at all. If we
become involved in litigation regarding our intellectual property rights or
the intellectual property rights of others, the potential cost of such
litigation, regardless of the strength of our legal position, and the potential
damages that we could be required to pay could be substantial.

Our business could suffer if we lose the services of, or fail to attract, key
personnel.
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We are highly dependent upon the efforts of our senior management and
scientific team, including our President and Chief Executive Officer,
Kerry Gray. The loss of the services of one or more of these individuals
could delay or prevent the achievement of our research, development,
marketing, or product commercialization objectives. While we have
employment agreements with Mr. Gray and David Nowotnik our Senior
Vice President Research and Development, their employment may be
terminated by them or us at any time. Mr. Gray's and Dr. Nowotnik's
agreements expire within one year and are extendable each year on the
anniversary date. We do not have employment contracts with our other
key personnel. We do not maintain any "key-man" insurance policies on
any of our key employees and we do not intend to obtain such insurance.
In addition, due to the specialized scientific nature of our business, we are
highly dependent upon our ability to attract and retain qualified scientific
and technical personnel. In view of the stage of our development and our
research and development programs, we have restricted our hiring to
research scientists and a small administrative staff and we have made no
investment in manufacturing, production, marketing, product sales or
regulatory compliance resources. If we develop pharmaceutical products
that we will commercialize ourselves, however, we will need to hire
additional personnel skilled in the clinical testing and regulatory
compliance process and in marketing and product sales. There is intense
competition among major pharmaceutical and chemical companies,
specialized biotechnology firms and universities and other research
institutions for qualified personnel in the areas of our activities, however,
and we may be unsuccessful in attracting and retaining these personnel.

Ownership of our shares is concentrated, to some extent, in the hands of
a few investors which could limit the ability of our other stockholders to
influence the direction of the company.
- --------------------------------------------------------------------------

Heartland Advisors, Inc. and Larry N. Feinberg (Oracle Partners LP,
Oracle Institutional Partners LP and Oracle Investment Management Inc.)
each currently beneficially own approximately 12.1% of our common
stock as of March 22, 2004. Accordingly, they collectively may have the
ability to significantly influence or determine the election of all of our
directors or the outcome of most corporate actions requiring stockholder
approval. They may exercise this ability in a manner that advances their
best interests and not necessarily those of our other stockholders.

Provisions of our charter documents could discourage an acquisition of
our company that would benefit our stockholders and may have the effect
of entrenching, and making it difficult to remove, management.
- -----------------------------------------------------------------------

Provisions of our Certificate of Incorporation, By-laws and Stockholders
Rights Plan may make it more difficult for a third party to acquire control
of our company, even if a change in control would benefit

11

our stockholders. In particular, shares of our preferred stock may be issued
in the future without further stockholder approval and upon such terms
and conditions, and having such rights, privileges and preferences, as our
Board of Directors may determine, including, for example, rights to
convert into our common stock. The rights of the holders of our common
stock will be subject to, and may be adversely affected by, the rights of
the holders of any of our preferred stock that may be issued in the future.
The issuance of our preferred stock, while providing desirable flexibility
in connection with possible acquisitions and other corporate purposes,
could have the effect of making it more difficult for a third party to
acquire control of us. This could limit the price that certain investors
might be willing to pay in the future for shares of our common stock and
discourage these investors from acquiring a majority of our common
stock. Further, the existence of these corporate governance provisions
could have the effect of entrenching management and making it more
difficult to change our management.

Substantial sales of our common stock could lower our stock price.
- ------------------------------------------------------------------

The market price for our common stock could drop as a result of sales of
a large number of our presently outstanding shares. Of the 15,314,816 shares
of our common stock that are outstanding as of March 22, 2004, 13,525,445
are unrestricted and freely tradable or tradable pursuant to a
resale registration statement or under Rule 144 of the Securities Act. An
additional 1,789,371 shares of common stock that are outstanding as of
March 22, 2004 are being registered hereunder and, upon effectiveness of
the registration statement of which this prospectus forms a part, will be
eligible for public resale.

We are not currently in compliance with AMEX continued listing
requirements and may not be able to maintain our AMEX listing.
- --------------------------------------------------------------

Our common stock is presently listed on the American Stock Exchange
under the symbol "AKC". All companies listed on AMEX are required to
comply with certain continued listing standards, including maintaining
stockholders' equity at required levels. We are not in compliance with this
stockholders' equity standard as of December 31, 2003. However, we
have until November 2004 to become compliant with such equity standard.
If we are unable to remedy any listing standard noncompliance with
AMEX under its regulations, or otherwise regain compliance, we cannot
assure you that our common stock will continue to remain eligible for
listing on AMEX. In the event that our common stock is delisted from
AMEX its market value and liquidity could be materially adversely
affected.


FORWARD LOOKING STATEMENTS

This prospectus contains forward-looking statements that involve risks and
uncertainties. These statements relate to future events or our future
financial performance. In some cases, you can identify forward-looking
statements by terminology such as "may," "will," "should," "expects,"
"plans," "could", "anticipates," "believes," "estimates," "predicts,"
"potential" or "continue" or the negative of such terms or other
comparable terminology. These statements are only predictions and
involve known and unknown risks, uncertainties and other factors,
including the risks outlined under "Risk Factors," that may cause our or
our industry's actual results, levels of activity, performance or
achievements to be materially different from any future results, levels or
activity, performance or achievements expressed or implied by such
forward-looking statements.

Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. We are under no duty to update
any of the forward-looking statements after the date of this prospectus to
conform such statements to actual results.

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USE OF PROCEEDS

We will not receive any proceeds from the sale of shares by the Selling
Stockholders. We will receive proceeds from the exercise of warrants if
payment is made in cash. All such proceeds will be used for general
corporate purposes.

SELLING STOCKHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of our common stock as of March 22, 2004 and as adjusted to
reflect the sale of our common stock offered hereby, by the Selling
Stockholders.

The Selling Stockholders, other than HCFP-Brenner Securities, LLC and
SCO Securities, LLC who were the placement agents in our recent private
placement, have not had any position, office or other material relationship
within the past three years with us or our affiliates. In addition, we
believe, based on information provided to us by the Selling Stockholders,
that each of the Selling Stockholders, except as noted below, have sole
voting and investment power with respect to the shares beneficially
owned. For more information regarding the shares offered, see "Plan of
Distribution" below.