Edgar Filing: DUSA PHARMACEUTICALS INC

As filed with the Securities and Exchange Commission on March 28, 2007

Registration No. ____________

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM S-8

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

DUSA PHARMACEUTICALS, INC.
(Exact Name of Registrant as Specified in Its Charter)

NEW JERSEY 22-3103129
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)

25 UPTON DRIVE
WILMINGTON, MASSACHUSETTS 01887
(Address of Principal Executive Offices) (Zip Code)

DUSA Pharmaceuticals, Inc. 2006 Equity Compensation Plan
DUSA Pharmaceuticals, Inc. Non-Qualified Deferred Compensation Plan
Class B Warrant
(Full Title of the Plan)

NANETTE W. MANTELL, ESQ.
REED SMITH LLP
PRINCETON FORRESTAL VILLAGE
136 MAIN STREET - SUITE 250
PRINCETON, NEW JERSEY 08543-7839
(609) 514-8541
(Name and Address and Telephone of Agent for Service)

COPIES TO:
ROBERT F. DOMAN, PRESIDENT AND CHIEF OPERATING OFFICER
DUSA PHARMACEUTICALS, INC.
25 UPTON DRIVE
WILMINGTON, MASSACHUSETTS 01887
(978) 657-7500

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CALCULATION OF REGISTRATION FEE

Proposed Proposed
Maximum Maximum
Amount Offering Aggregate Amount of
Title of Each Class of Securities to be Price Offering Registration
to be Registered Registered Per Share Price Fee
--------------------------------- ---------- --------- --------- ------------

2006 Equity Compensation Plan - Shares of Common
Stock, no par value (options reserved for future grants) 335,000(1) $3.39(2) $1,135,650 $34.86

Deferred Compensation Obligations $150,000 100%(3) $150,000 $ 4.61

Class B Warrant 250,000* -- -- $ -0-

TOTAL REGISTRATION FEE.................................. $39.47

(1) Together with an indeterminate number of additional shares which may be
issued pursuant to the DUSA Pharmaceuticals, Inc. 2006 Equity Compensation
Plan, as amended, as a result of stock splits, stock dividends or similar
transactions in accordance with Rule 416.

(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(h)(1) of the Securities Act of 1933, as amended, based
upon the average of the high and low price as reported on The NASDAQ
National Market on March 23, 2007.

(3) The Deferred Compensation Obligations are unsecured obligations of the
Registrant to pay deferred compensation in the future in accordance with
the terms of the DUSA Pharmaceuticals, Inc. Non-Qualified Deferred
Compensation Plan.

* Previously paid

INTRODUCTORY STATEMENT

This registration statement on Form S-8 relates to shares of DUSA
Pharmaceuticals, Inc. common stock, no par value, now eligible for issuance
under the DUSA Pharmaceuticals, Inc. 2006 Equity Compensation Plan (the "Equity
Plan") and obligations of the Company to participants in the DUSA
Pharmaceuticals, Inc. Non-Qualified Deferred Compensation Plan (the "Deferred
Comp Plan" and collectively with the Equity Plan, the "Plans").

This registration statement also includes a reoffer prospectus with respect
to shares underlying certain grants made under the Equity Plan. The inclusion of
the individuals listed under the "Selling Securityholder" section of the
prospectus does not constitute a commitment to sell any or all of the stated
number of shares of common stock. The number of shares offered shall be
determined from time to time by each selling securityholder at their sole
discretion and such individuals are listed as selling securityholders solely to
register the shares that each has received or will receive upon the exercise of
options under the Equity Plan.

PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS

The documents containing the information required by Part I of Form S-8
have been or will be sent or given to the participants in the Plans being
registered hereby as specified by Rule 428(b)(1) of Regulation C under the
Securities Act of 1933, as amended, and such documents taken together with the
documents incorporated by reference in this registration statement shall
constitute a prospectus that meets the requirements of Section 10(a) of the
Securities Act. Pursuant to Rule 428 of the Securities Act such documents are
not required to be filed with the Commission as part of this registration
statement or as an Exhibit hereto.

PROSPECTUS

335,000 SHARES OF COMMON STOCK BY SELLING SECURITYHOLDERS

DUSA PHARMACEUTICALS, INC.

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The shares of common stock of DUSA Pharmaceuticals, Inc. covered by this
prospectus may be offered and sold to the public by certain selling
securityholders of DUSA. The selling securityholders have acquired or will
acquire the shares through their exercise of stock options granted to them under
DUSA's 2006 Equity Compensation Plan and a Class B Warrant Agreement with D.
Geoffrey Shulman.

Our common stock is quoted on the Nasdaq Global Market under the symbol
"DUSA." On March 27, 2007, the closing price of a share of our common stock on
the Nasdaq Global Market was $3.66 per share.

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INVESTING IN OUR COMMON STOCK INVOLVES RISKS. 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 THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

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The date of this prospectus is March __, 2007.

TABLE OF CONTENTS

Page
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DUSA Pharmaceuticals, Inc................................................ 1
Risk Factors............................................................. 3
Use of Proceeds.......................................................... 15
Selling Securityholders.................................................. 16
Plan of Distribution..................................................... 18
Legal Matters............................................................ 18
Experts.................................................................. 19
Where You Can Find More Information...................................... 19
Incorporation of Certain Documents by Reference.......................... 19

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The mailing address and telephone number of our principal executive offices
is 25 Upton Drive, Wilmington, Massachusetts 01887 and (978) 657-7500.

You should rely only on the information contained in this prospectus or any
supplement, including the documents that we incorporate by reference. We have
not authorized anyone to provide you with information different from that which
is contained in or incorporated by reference to this prospectus. We are offering
to sell shares of common stock and seeking offers to buy shares of common stock
only in jurisdictions where offers and sales are permitted. The information
contained in this prospectus is accurate only as of the date of the prospectus,
regardless of the time of delivery of this prospectus or of any sale of the
common stock.

DUSA PHARMACEUTICALS, INC. (R)

DUSA Pharmaceuticals, Inc. is a vertically integrated dermatology company
that is developing and marketing Levulan(R) photodynamic therapy and other
products for common skin conditions. Our marketed products include among others
Levulan(R) Kerastick(R) 20% Topical Solution with PDT, the BLU-U(R) brand light
source, Nicomide(R), Nicomide-T(R) and the AVAR(R) line of products.

Historically, we devoted most of our resources to fund research and
development efforts in order to advance the Levulan(R) PDT/PD technology
platform. Our drug, Levulan(R) brand of aminolevulinic acid HCl, or ALA, is
being used with light, investigationally, in a broad range of medical
conditions. When Levulan(R) is used and followed with exposure to light to treat
a medical condition, it is known as Levulan(R) photodynamic therapy, or
Levulan(R) PDT. When Levulan(R) is used and followed with exposure to light to
detect medical conditions, it is known as Levulan(R) photodetection, or
Levulan(R) PD.

We launched Levulan(R) Kerastick(R) 20% Topical Solution with PDT and the
BLU-U(R) brand light source in the United States in September 2000 for the
treatment of actinic keratoses, or AKs, of the face or scalp. AKs are
precancerous skin lesions caused by chronic sun exposure that can develop over
time into a form of skin cancer called squamous cell carcinoma. In addition, in
September 2003, we received clearance from the U.S. Food and Drug
Administration, or FDA, to market the BLU-U(R) without Levulan(R) PDT for the
treatment of moderate inflammatory acne vulgaris and general dermatological
conditions. We are devoting significant resources to developing Levulan PDT for
the treatment of moderate to severe acne.

We are developing Levulan(R) PDT and PD under an exclusive worldwide
license of patents and technology from PARTEQ Research and Development
Innovations, the licensing arm of Queen's University, Kingston, Ontario, Canada.
We also own or license certain other patents relating to methods for using
pharmaceutical formulations which contain Levulan(R) and related processes and
improvements. We have entered into several distribution and license agreements
in order to exploit our Levulan(R) technology platform internationally.

In March 2006, we acquired Nicomide(R), Nicomide-T(R), the AVAR(R) line of
products, among others, called Non-PDT Drug Products and certain product
candidates in early stages of development, which target the treatment of acne
vulgaris and acne rosacea, as well as psoriasis, in connection with our merger
with Sirius Laboratories, Inc. Sirius was a dermatology specialty
pharmaceuticals company founded in 2000 with a primary focus on the treatment of
acne vulgaris and acne rosacea. We believe that the purchase of Sirius has
enabled us to expand our product portfolio, capitalize on cross-selling and
marketing opportunities, increase our sales force size; as well as, develop a
pipeline of new products.

Shortly after the closing of the merger, we became engaged in patent
litigation with River's Edge, a company that launched a generic Nicomide(R)
product. River's Edge also requested that the United States Patent and Trademark
Office, or USPTO, reexamine the Nicomide(R) patent claiming that it is invalid.
The USPTO accepted the application for reexamination of the patent and the
parties have submitted their responses to the first office action. Although the
court issued a preliminary injunction against sales of River's Edge's product in
May, 2006, the injunction was lifted on March 7, 2007, due, in part, to the
court's determination that the reexamination process presented sufficient
changed circumstances to warrant the dissolution of the injunction. We expect
that River's Edge will reenter the market with its product in competition with
Nicomide(R). We expect that Nicomide(R) sales will be adversely impacted
throughout the litigation process. In the interim, we are considering
alternative strategies aimed at mitigating market share loss. If we do not
ultimately prevail in our lawsuit, or if the Nicomide(R) patent is found to be
invalid by the court or the USPTO, our revenues from sales of Nicomide(R) will
decrease permanently. We expect to eliminate some expenses planned for 2007 and
reallocate others to provide more support to Levulan(R) and our new product,
ClindaReach(TM). We have reviewed the valuation of our intangible assets and
goodwill associated with Nicomide(R) for impairment have recorded an impairment
charge of $15.7 million to write down the remaining net book value of the
intangible assets. See section entitled "Risk Factors - Risks Related to DUSA."

Nicomide(R), one of the key products we purchased from Sirius, is an oral
prescription vitamin supplement, and Nicomide-T(R) is a topical cosmetic
product. Both products target the acne and acne rosacea markets. Acne is a
common skin condition caused, in part, by the blockage and/or inflammation of
sebaceous (oil) glands. Acne rosacea is a condition that primarily affects the
skin of the face and typically first appears between the ages of 30 and 60 as a
transient flushing or blushing on the nose, cheeks, chin or forehead,
progressing in many patients to a papulopustular form clinically similar to acne
vulgaris (inflammatory acne). The AVAR line of products includes a number of
leave-on and cleanser formulations of sodium sulfacetamide and sulphur, a drug
combination long known to have anti-acne, anti-inflammatory properties. In
addition, we launched one of the product candidates, ClindaReach(TM), a
medicated pad with a proprietary wand applicator for use in the treatment of
acne of the back.

We are continuing to evaluate and develop several other potential products
that we acquired in our merger with Sirius

which target patients with acne and rosacea. We are also continuing to seek to
acquire and/or license additional dermatology products that complement our
current product portfolio that would provide our sales force with additional
complementary products to sell in the near to medium term.

In the United States, AVAR(R), AVAR Green(R), AVAR-e(R), AVAR-e Green(R),
AVAR Cleanser(R), BLU-U(R), DUSA(R), DUSA Pharmaceuticals, Inc.(R),
Kerastick(R), Levulan(R), METED(R), Nicomide(R), Nicomide-T(R), Psoriacap,(R)
Psoriatec(R) and Sirius Laboratories, Inc. (R) are registered trademarks.
Several of these trademarks are also registered in Europe, Australia, Canada,
and in other parts of the world. Numerous other trademark applications are
pending.

As of December 31, 2006, we had an accumulated deficit of approximately
$120,887,000. We expect to continue to incur operating losses through 2007.
Achieving our goal of becoming a profitable operating company is dependent upon
greater acceptance of our PDT therapy by the medical and consumer
constituencies, and increasing sales of the products we acquired from Sirius,
particularly ClindaReach(TM), and other factors contained in this report,
including prevailing in the Nicomide(R) patent litigation, and in the filings we
make with the Securities and Exchange Commission.

Unless the context otherwise requires, the terms "we," "our," "us," "the
Company" and "DUSA" refer to DUSA Pharmaceuticals, Inc., a New Jersey
corporation.

We were incorporated on February 21, 1991, under the laws of the State of
New Jersey. Our principal executive offices are located at 25 Upton Drive,
Wilmington, Massachusetts 01887 (telephone: (978) 657-7500) (webaddress:
www.dusapharma.com). On March 3, 1994, we formed DUSA Pharmaceuticals New York,
Inc., a wholly owned subsidiary located in Valhalla, New York, to coordinate our
research and development efforts. DUSA Acquisition Corp., now known as Sirius
Laboratories, Inc., also a wholly-owned subsidiary of DUSA, was formed on
January 26, 2006, in connection with the Sirius merger. We have financed our
operations to date, primarily from sales of our products, sales of securities in
public offerings, private and offshore transactions that are exempt from
registration under the Securities Act of 1933, as amended, or the Act, including
a private placement under Regulation D of the Act which was consummated on
February 27, 2004, and from payments received as part of the agreement with a
former marketing collaborator.

RISK FACTORS

Investing in our common stock is very speculative and involves a high
degree of risk. You should carefully consider and evaluate all of the
information in, or incorporated by reference in, this report. The following are
among the risks we face related to our business, assets and operations. They are
not the only ones we face. Any of these risks could materially and adversely
affect our business, results of operations and financial condition, which in
turn could materially and adversely affect the trading price of our common stock
and you might lose all or part of your investment.

This report contains forward-looking statements that involve risks and
uncertainties, such as statements of our plans, objectives, expectations and
intentions. We use words such as "anticipate", "believe", "expect", "future" and
"intend" and similar expressions to identify forward-looking statements. Our
actual results could differ materially from those anticipated in these
forward-looking statements for many reasons, including the factors described
below and elsewhere in this report. You should not place undue reliance on these
forward-looking statements, which apply only as of the date of this report.

RISKS RELATED TO DUSA

WE ARE NOT CURRENTLY PROFITABLE AND MAY NOT BE PROFITABLE IN THE FUTURE UNLESS
WE CAN SUCCESSFULLY MARKET AND SELL SIGNIFICANTLY HIGHER QUANTITIES OF OUR
PRODUCTS.

NICOMIDE(R) WILL LIKELY LOSE SIGNIFICANT MARKET SHARE WITH THE ANTICIPATED
ENTRY OF A GENERIC PRODUCT AND OUR ABILITY TO BECOME PROFITABLE WILL BE
MORE DIFFICULT

In March 2006, we acquired Nicomide(R), in connection with our merger with
Sirius Laboratories, Inc. Shortly after the closing of the merger, we became
engaged in patent litigation with River's Edge, a company that launched a
generic Nicomide(R) product. River's Edge has also requested that the United
States Patent and Trademark Office reexamine the Nicomide(R) patent claiming
that it is invalid. The USPTO accepted the application for reexamination of the
patent and the parties have submitted their responses to the first office
action. Although the court issued a preliminary injunction against sales of
River's Edge's product in May, 2006, the injunction was lifted on March 7, 2007,
due, in part, to the court's determination that the reexamination process
presented sufficient changed circumstances to warrant the dissolution of the
injunction. We expect that River's Edge will reenter the market with its product
in competition with Nicomide(R). We expect that Nicomide(R) sales will be
adversely impacted throughout the litigation process and have a material
negative impact on our revenues, results of operations and liquidity. If we do
not ultimately prevail in our lawsuit, or if the Nicomide(R) patent is found to
be invalid, our revenues from sales of Nicomide(R) will decrease permanently,
and our ability to become profitable will be more difficult. We have reviewed
the valuation of our intangible assets and goodwill associated with Nicomide(R)
for impairment and have recorded an impairment charge of $15.7 million to write
down the remaining net book value of the intangible assets.

ANY FAILURE TO COMPLY WITH ONGOING GOVERNMENTAL REGULATIONS IN THE UNITED
STATES AND ELSEWHERE WILL LIMIT OUR ABILITY TO MARKET OUR PRODUCTS.

The manufacture and marketing of our products are subject to continuing FDA
review as well as comprehensive regulation by the FDA and by state and local
regulatory authorities. These laws require, among other things:

- approval of manufacturing facilities, including adherence to good
manufacturing and laboratory practices during production and
storage,

- controlled research and testing of some of these products even
after approval, and

- control of marketing activities, including advertising and
labeling.

If we, or any of our contract manufacturers, fail to comply with these
requirements, we may be limited in the jurisdictions in which we are permitted
to sell our products. Additionally, if we or our manufacturers fail to comply
with applicable regulatory approval requirements, a regulatory agency may also:

- send us warning letters,

- impose fines and other civil penalties on us,

- seize our products,

- suspend our regulatory approvals,

- cease the manufacture of our products

- refuse to approve pending applications or supplements to approved
applications filed by us,

- refuse to permit exports of our products from the United States,

- require us to recall products,

- require us to notify physicians of labeling changes and/or
product related problems,

- impose restrictions on our operations, and/or

- criminally prosecute us.

We and our manufacturers must continue to comply with the FDA's Good
Manufacturing Practice, commonly known as cGMP, and Quality System Regulation,
or QSR, and equivalent foreign regulatory requirements. The cGMP requirements
govern quality control and documentation policies and procedures. In complying
with cGMP and foreign regulatory requirements, we and our third-party
manufacturers will be obligated to expend time, money and effort in production,
record keeping and quality control to assure that our products meet applicable
specifications and other requirements.

As part of our FDA approval for the Levulan(R) Kerastick(R) for AK, we were
required to conduct two Phase IV follow-up studies. We successfully completed
the first study; and submitted our final report on the second study to the FDA
in January 2004. The FDA could request additional information and/or studies.
Additionally, if previously unknown problems with the product, a manufacturer or
its facility are discovered in the future, changes in product labeling
restrictions or withdrawal of the product from the market may occur.

Manufacturing facilities are subject to ongoing periodic inspection by the
FDA, including unannounced inspections. We cannot guarantee that our third-party
supply sources, or our own Kerastick(R) facility, will continue to meet all
applicable FDA regulations. If we, or any of our manufacturers, including
without limitation, the manufacturer of Nicomide(R), who has received warning
letters from the FDA, or the manufacturer of the AVAR(R) products, fail to
maintain compliance with FDA regulatory requirements, it would be time consuming
and costly to remedy the problem(s) or to qualify other sources. These
consequences could have a significant adverse effect on our financial condition
and operations.

such products to submit applications to obtain marketing approval and we have
begun discussions with FDA to begin that process. FDA's enforcement discretion
policy does not apply to drugs or firms that may be in violation of regulatory
requirements other than preapproval submission requirements and FDA may bring an
action against a drug or a firm when FDA concludes that such other violations
exist. The contract manufacturer of Nicomide(R) has received a request from the
FDA for labeling information and justification for the belief that the product
is exempt from drug approval requirements, has received a warning letter to
cease manufacturing a different marketed unapproved drug, and has been cited for
GMP violations. We believe that the GMP issues do not directly involve our
products. There can be no assurance that the FDA will continue this policy or
not take a contrary position with any individual products. If the FDA were to do
so, we may be required to make certain labeling changes and market these
products as over-the-counter products or as dietary supplements under applicable
legislation, or withdraw such products from the market, unless and until we
submit a marketing application and obtain FDA marketing approval. Any such
action by the FDA could have a material impact on our Non-PDT Drug Product
revenues, particularly if the action were taken with respect to Nicomide(R).
Label changes eliminating claims of certain medicinal benefits could make it
more difficult to market these products and could therefore, negatively affect
our revenues and profits.

PATENT LITIGATION IS EXPENSIVE, AND WE MAY NOT BE ABLE TO AFFORD THE COSTS.

The costs of litigation or any proceeding relating to our intellectual
property rights could be substantial even if resolved in our favor. Some of our
competitors have far greater resources than we do and may be better able to
afford the costs of complex patent litigation. For example, third-parties may
infringe one or more of our patents, and we are spending significant resources
to enforce our patent rights. Also, in a lawsuit against a third-party for
infringement of our patents in the United States, that third-party may challenge
the validity of our patent(s). We cannot guarantee that a third-party will not
claim, with or without merit, that our patents are not valid, as in the case
described below, or that we have infringed their patent(s) or misappropriated
their proprietary material. Defending these types of legal actions involve
considerable expense and could negatively affect our financial results.

Additionally, if a third-party were to file a United States patent
application in the United States, or be issued a patent claiming technology also
claimed by us in a pending United States application(s), we may be required to
participate in interference proceedings in the United States Patent and
Trademark Office to determine the priority of the invention. A third-party could
also request the declaration of a patent interference between one of our issued
United States patents and one of its patent applications. Any interference
proceedings likely would require participation by us and/or PARTEQ, could
involve substantial legal fees and result in a loss or lessening of our patent
protection.

On March 28, 2006, a lawsuit was filed by River's Edge Pharmaceuticals,
LLC, or River's Edge, against us alleging, among other things, that, prior to
the merger, Sirius Laboratories, Inc. agreed to authorize River's Edge to market
a generic version of Nicomide(R), and that the United States patent covering
Nicomide(R) issued to Sirius in December, 2005 is invalid. The declaratory
judgment suit was filed in the United States District Court for the Northern
District of Georgia, Gainesville Division and has been dismissed. Nicomide is
one of the key products DUSA acquired from Sirius in its merger. On April 20,
2006, we filed a patent infringement suit in the United States District Court in
Trenton, New Jersey alleging that a River's Edge niacinamide product infringes
United States Patent No. 6,979,468, the patent that covers Nicomide(R). Although
a preliminary injunction against sales of River's Edge's product had been in
place since May, 2006, the injunction was lifted on March 7, 2007, so we expect
that River's Edge will sell its product in competition with Nicomide(R). We
expect that Nicomide(R) sales will decrease significantly during the litigation
process and make it more difficult to afford the cost of the litigation. If we
do not ultimately prevail in our lawsuit, or if the Nicomide(R) patent is found
to be invalid, our revenues from sales of Nicomide(R) will decrease permanently.
We expect to eliminate some expenses planned for 2007 and reallocate others to
provide more support to Levulan(R) and our new product, ClindaReach(TM). We have
reviewed the valuation of our intangible assets and goodwill associated with
Nicomide(R) for impairment and have recorded an impairment charge of $15.7
million to write down the remaining net book value of the intangible assets.

During 2005 and 2006, we filed several lawsuits against chemical suppliers,
compounding pharmacies, a light device company, its distributor and a sales
representative, and physicians alleging violations of patent law. While we have
been successful in obtaining a default judgment against one compounding
pharmacy, settled other suits favorably, and obtained consent judgments from
several physicians, we do not know whether these lawsuits will prevent others
from infringing our patents or whether we will be successful in stopping these
activities which we believe are negatively affecting our revenues.

IF PRODUCT SALES DO NOT INCREASE SIGNIFICANTLY WE MAY NOT BE ABLE TO
ADVANCE DEVELOPMENT OF OUR OTHER POTENTIAL PRODUCTS AS QUICKLY AS WE WOULD
LIKE TO, WHICH WOULD DELAY THE APPROVAL PROCESS AND MARKETING OF NEW
POTENTIAL PRODUCTS.

If we do not generate sufficient revenues from our approved products, we
may be forced to delay or abandon some or all of our product development
programs as we are doing with Levulan(R) PDT for photodamage. The pharmaceutical
development and commercialization process is time consuming and costly, and any
delays might result in higher costs which could adversely affect our financial
condition. Without sufficient product sales, we might be required to seek
additional funding. There is no guarantee that adequate funding sources could be
found to continue the development of all our potential products. We might be
required to commit substantially greater capital than we have available to
research and development of such products and we may not have sufficient funds
to complete all or any of our development programs.

SINCE WE NOW OPERATE THE ONLY FDA APPROVED MANUFACTURING FACILITY FOR THE
KERASTICK(R) AND CONTINUE TO RELY HEAVILY ON SOLE SUPPLIERS FOR THE
MANUFACTURE OF LEVULAN(R), THE BLU-U(R), NICOMIDE(R), NICOMIDE-T(R), THE
AVAR(R) LINE OF PRODUCTS, METED(R), PSORIACAP(R) AND PSORIATEC(R), ANY
SUPPLY OR MANUFACTURING PROBLEMS COULD NEGATIVELY IMPACT OUR SALES.

If we experience problems producing Kerastick(R) units in our facility, or
if any of our contract suppliers fail to supply our requirements for products,
our business, financial condition anD results of operations would suffer.
Although we have received approval by the FDA to manufacture the BLU-U(R) and
the Kerastick(R) in our Wilmington, Massachusetts facility, at this time with
respect to THE BLU-U(R), we expect to utilize our own facility only as a back-up
to our current third party manufacturer or for repairs.

The sole supplier of Nicomide(R) has received warning letters from the FDA
regarding certain regulatory observations. The primary observations noted in the
warning letters were not related tO Nicomide(R). However, with respect to
Nicomide(R) and certain other products manufactured by this supplier, the FDA
has requested that the manufacturer provide a copy of the labeling and
information providING the basis for an exemption from the drug approval
requirements. The FDA regulates such products under the compliance policy guide
described above entitled, "Marketed New Drugs without Approved NDAs or ANDAs."

Nicomide(R) is one of the key products DUSA acquired from Sirius
Laboratories, Inc. in connection with our merger completed in March, 2006.
Nicomide(R) is an oral prescription vitamin supplemeNT. If the FDA is not
satisfied with the response to the warning letters issued to the manufacturer of
Nicomide(R) and causes the manufacturer to cease operations, our revenues will
be significantly negativelY affected.

Manufacturers and their subcontractors often encounter difficulties when
commercial quantities of products are manufactured for the first time, or large
quantities of new products are manufactured, including problems involving:

- product yields,

- quality control,

- component and service availability,

- compliance with FDA regulations, and

- the need for further FDA approval if manufacturers make material
changes to manufacturing processes and/or facilities.

We cannot guarantee that problems will not arise with production yields,
costs or quality as we and our suppliers seek to increase production. Any
manufacturing problems could delay or limit our supplies which would hinder our
marketing and sales efforts.

If our facility, any facility of our contract manufacturers, or any
equipment in those facilities is damaged or destroyed, we may not be able to
quickly or inexpensively replace it. Likewise, if there are any quality or
supply problems with any components or materials needed to manufacturer our
products, we may not be able to quickly remedy the problem(s). Any of these
problems could cause our sales to suffer.

WE HAVE ONLY LIMITED EXPERIENCE MARKETING AND SELLING PHARMACEUTICAL
PRODUCTS AND, AS A RESULT, OUR REVENUES FROM PRODUCT SALES MAY SUFFER.

If we are unable to successfully market and sell sufficient quantities of
our products, revenues from product sales will be lower than anticipated and our
financial condition may be adversely affected. We are responsible for marketing
our products in the United States and the rest of the world, except Canada,
Latin America and parts of Asia, where we have distributors. We are doing so
without the experience of having marketed pharmaceutical products prior to 2000.
In October 2003, DUSA began hiring a small direct sales force and we increased
the size of our sales force to market our products in the United States. In
addition, our sales personnel have only recently begun to sell and market the
products we acquired in our merger with Sirius. If our sales and marketing
efforts fail, then sales of the Kerastick(R), the BLU-U(R), Nicomide(R) and
other products will be adversely affected.

IF WE CANNOT IMPROVE PHYSICIAN REIMBURSEMENT AND/OR CONVINCE MORE PRIVATE
INSURANCE CARRIERS TO ADEQUATELY REIMBURSE PHYSICIANS FOR OUR PRODUCT SALES
MAY SUFFER.

Without adequate levels of reimbursement by government health care programs
and private health insurers, the market for our Levulan(R) Kerastick(R) for AK
therapy will be limited. While WE continue to support efforts to improve
reimbursement levels to physicians and are working with the major private
insurance carriers to improve coverage for our therapy, if our efforts are not
successful, a broader adoption of our therapy and sales of our products could be
negatively impacted. Although some reimbursement changes related to AK were made
in 2005 and 2006, some physicians still believe that reimbursement levels do not
fully reflect the required efforts to routinely execute our therapy in their
practices.

If insurance companies do not cover, or stop covering products which are
covered, including Nicomide(R), our sales could be dramatically reduced.

THE COMMERCIAL SUCCESS OF ANY PRODUCTS THAT WE MAY DEVELOP WILL DEPEND UPON
THE DEGREE OF MARKET ACCEPTANCE OF OUR PRODUCTS AMONG PHYSICIANS, PATIENTS,
HEALTH CARE PAYORS, PRIVATE HEALTH INSURERS AND THE MEDICAL COMMUNITY.

Our ability to commercialize any products that we may develop will be
highly dependent upon the extent to which these products gain market acceptance
among physicians, patients, health care payors, such as Medicare and Medicaid,
private health insurers, including managed care organizations and group
purchasing organizations, and the medical community. If these products do not
achieve an adequate level of acceptance, we may not generate material product
revenues, and we may not become profitable. The degree of market acceptance of
our product candidates, if approved for commercial sale, will depend on a number
of factors, including:

- the effectiveness, or perceived effectiveness, of our products in
comparison to competing products;

- the existence of any significant side effects, as well as their
severity in comparison to any competing products;

- potential advantages over alternative treatments;

- the ability to offer our products for sale at competitive prices;

- relative convenience and ease of administration;

- the strength of marketing and distribution support; and

- sufficient third-party coverage or reimbursement.

WE HAVE SIGNIFICANT LOSSES AND ANTICIPATE CONTINUED LOSSES

We have a history of operating losses. We expect to have continued losses
until sales of our products increase substantially. We incurred a net loss of
$18,269,000 for the quarter ended December 31, 2006. We incurred net losses of
$31,350,000 and $14,999,000 for the years ended December 31, 2006 and 2005,
respectively. As of December 31, 2006, our accumulated deficit was approximately
$120,887,000. We cannot predict whether any of our products will achieve
significant enough market acceptance or generate sufficient revenues to enable
us to become profitable on a sustainable basis.

IF WE ARE UNABLE TO PROTECT OUR PROPRIETARY TECHNOLOGY, TRADE SECRETS OR
KNOW-HOW, WE MAY NOT BE ABLE TO OPERATE OUR BUSINESS PROFITABLY.

WE HAVE LIMITED PATENT PROTECTION AND IF WE ARE UNABLE TO PROTECT OUR
PROPRIETARY RIGHTS, COMPETITORS MIGHT BE ABLE TO DEVELOP SIMILAR PRODUCTS
TO COMPETE WITH OUR PRODUCTS AND TECHNOLOGY.

Our ability to compete successfully depends, in part, on our ability to
defend patents that have issued, obtain new patents, protect trade secrets and
operate without infringing the proprietary rights of others. We have no compound
patent protection for our Levulan(R) brand of the compound ALA. Our basic ALA
patents are for methods of detecting and treating various diseased tissues using
ALA (oR related compounds called precursors), in combination with light. We own
or exclusively license ALA patents and patent applications related to the
following:

- methods of using ALA and its unique physical forms in combination with
light,

- compositions and apparatus for those methods, and

- unique physical forms of ALA.

We have limited ALA patent protection outside the United States, which may
make it easier for third-parties to compete there. Our basic method of treatment
patents and applications have counterparts in only six foreign countries, and
certain countries under the European Patent Convention. Even where we have
patent protection, there is no guarantee that we will be able to enforce our
patents. Additionally, enforcement of a given patent may not be practicable or
an economically viable alternative.

Some of the indications for which we may develop PDT therapies may not be
covered by the claims in any of our existing patents. Even with the issuance of
additional patents to DUSA, other parties are free to develop other uses of ALA,
including medical uses, and to market ALA for such uses, assuming that they have
obtained appropriate regulatory marketing approvals. ALA in the chemical form
has been commercially supplied for decades, and is not itself subject to patent
protection. There are reports of third-parties conducting clinical studies with
ALA in countries outside the United States where PARTEQ, the licensor of our ALA
patents, does not have patent protection. In addition, a number of third-parties
are seeking patents for uses of ALA not covered by our patents. These other
uses, whether patented or not, and the commercial availability of ALA, could
limit the scope of our future operations because ALA products could come on the
market which would not infringe our patents but would compete with our
Levulan(R) products even though they are marketed for different uses.

Nicomide(R) is covered by a United States patent which issued in December
2005. River's Edge Pharmaceuticals, LLC has filed an application with the U.S.
Patent and Trademark Office, or USPTO, for the reexamination of the patent. The
USPTO accepted the application for reexamination of the patent and the parties
have submitted their responses to the first office action. If the USPTO finds
that the patent is invalid, generic products will

be able to lawfully compete with Nicomide(R). Although the court, in the patent
infringement litigation described above, issued a preliminary injunction against
saleS of River's Edge's product in May 2006, the injunction was lifted on March
7, 2007, due, in part, to the court's determination that the reexamination
process presented sufficient changed circumstances to warrant the dissolution of
the injunction. We expect that River's Edge will reenter the market with its
product in competition with Nicomide(R). Also, recently two new products have
been launched that coulD compete with Nicomide(R). These events could cause us
to lose significant revenues and put our ability to be profitable at risk. If we
have to change the Nicomide(R) formulation to meet regulatory requiremenTS, we
may not have patent protection.

While we attempt to protect our proprietary information as trade secrets
through agreements with each employee, licensing partner, consultant,
university, pharmaceutical company and agent, we cannot guarantee that these
agreements will provide effective protection for our proprietary information. It
is possible that:

- these persons or entities might breach the agreements,

- we might not have adequate remedies for a breach, and/or

- our competitors will independently develop or otherwise discover our
trade secrets;

all of which could negatively impact our ability to be profitable.

WE HAVE ONLY 2 LEVULAN(R) THERAPIES THAT HAVE RECEIVED REGULATORY APPROVAL OR
CLEARANCE AND WE CANNOT PREDICT WHETHER WE WILL EVER DEVELOP OR COMMERCIALIZE
ANY OTHER LEVULAN(R) PRODUCTS.

OUR POTENTIAL PRODUCTS ARE IN EARLY STAGES OF DEVELOPMENT AND MAY NEVER
RESULT IN ANY COMMERCIALLY SUCCESSFUL PRODUCTS.

To be profitable, we must successfully research, develop, obtain regulatory
approval for, manufacture, introduce, market and distribute our products. Except
for Levulan(R) PDT for AKs, thE BLU-U(R) for acne, the ClindaReach(TM) pledget
and the currently marketed products we acquired in our merger with Sirius, all
of our other potential Levulan(R) and other potential product candidates are at
an EARLY stage of development and subject to the risks of failure inherent in
the development of new pharmaceutical products and products based on new
technologies. These risks include:

- delays in product development, clinical testing or manufacturing,

- unplanned expenditures in product development, clinical testing or
manufacturing,

- failure in clinical trials or failure to receive regulatory approvals,

- emergence of superior or equivalent products,

- inability to market products due to third-party proprietary rights,
and

- failure to achieve market acceptance.

We cannot predict how long the development of our investigational stage
products will take or whether they will be medically effective. We cannot be
sure that a successful market will continue to develop for our Levulan(R) drug
technology.

WE MUST RECEIVE SEPARATE APPROVAL FOR EACH OF OUR POTENTIAL PRODUCTS BEFORE
WE CAN SELL THEM COMMERCIALLY IN THE UNITED STATES OR ABROAD.

All of our potential Levulan(R) products will require the approval of the
FDA before they can be marketed in the United States. If we fail to obtain the
required approvals for these products ouR revenues will be limited. Before an
application to the FDA seeking approval to market a new drug, called an NDA, can
be filed, a product must

undergo, among other things, extensive animal testing and human clinical trials.
The process of obtaining FDA approvals can be lengthy, costly, and
time-consuming. Following the acceptance of an NDA, the time required for
regulatory approval can vary and is usually 1 to 3 years or more. The FDA may
require additional animal studies and/or human clinical trials before granting
approval. Our Levulan(R) PDT products are based on relatively new technology. To
the best of ouR knowledge, the FDA has approved only 3 drugs for use in
photodynamic therapy, including Levulan(R). This factor may lengthen the
approval process. We face much trial and error and we may fail at numerouS
stages along the way.

We cannot predict whether we will obtain approval for any of our potential
products. Data obtained from preclinical testing and clinical trials can be
susceptible to varying interpretations which could delay, limit or prevent
regulatory approvals. Future clinical trials may not show that Levulan(R) PDT or
photodetection, known as PD, is safe and effective for any new use we are
studying. IN addition, delays or disapprovals may be encountered based upon
additional governmental regulation resulting from future legislation or
administrative action or changes in FDA policy. During September 2005, the FDA
issued guidance for the pharmaceutical industry regarding the development of new
drugs for acne vulgaris treatment. We are developing Levulan(R) PDT for acne.
The FDA may issue additional guidance iN the future, which may result on
additional costs and delays. We must also obtain foreign regulatory clearances
before we can market any potential products in foreign markets. The foreign
regulatory approval process includes all of the risks associated with obtaining
FDA marketing approval and may impose substantial additional costs.

Certain of the products acquired in connection with the Sirius merger must
meet certain minimum manufacturing and labeling standards established by the FDA
and applicable to products marketed without approved marketing applications
including Nicomide(R). FDA regulates such products under its marketed unapproved
drugs compliance policy guide entitled, "Marketed New Drugs without Approved
NDAs oR ANDAs." Under this policy, FDA recognizes that certain unapproved
products, based on the introduction date of their active ingredients and the
lack of safety concerns, have been marketed for many years and, at this time,
will not be the subject of any enforcement action. The FDA has recently taken a
more proactive role and is strongly encouraging manufacturers of such products
to submit applications to obtain marketing approval and we have begun
discussions with FDA to begin that process. FDA's enforcement discretion policy
does not apply to drugs or firms that may be in violation of regulatory
requirements other than preapproval submission requirements and FDA may bring an
action against a drug or a firm when FDA concludes that such other violations
exist. The contract manufacturer of Nicomide(R) has received A request from the
FDA for labeling information and justification for the belief that the product
is exempt from drug approval requirements, has received a warning letter to
cease manufacturing a different marketed unapproved drug, and has been cited for
GMP violations. We believe that the GMP issues do not directly involve our
products. There can be no assurance that the FDA will continue this policy or
not take a contrary position with any individual products. If the FDA were to do
so, we may be required to make certain labeling changes and market these
products as over-the-counter products or as dietary supplements under applicable
legislation, or withdraw such products from the market, unless and until we
submit a marketing application and obtain FDA marketing approval.

IF WE ARE UNABLE TO OBTAIN THE NECESSARY CAPITAL TO FUND OUR OPERATIONS, WE
WILL HAVE TO DELAY OUR DEVELOPMENT PROGRAMS AND MAY NOT BE ABLE TO COMPLETE
OUR CLINICAL TRIALS.

We may need substantial additional funds to fully develop, manufacture,
market and sell our other potential products. We may obtain funds through other
public or private financings, including equity financing, and/or through
collaborative arrangements. We cannot predict whether any financing will be
available at all or on acceptable terms.

Depending on the extent of available funding, we may delay, reduce in scope
or eliminate some of our research and development programs. We have, in fact,
delayed additional studies relating to the use of Levulan(R) PDT to treat facial
photodamage due, in part, to funding considerations and strategic
prioritization. We may also choose to license rights to third parties to
commercialize products oR technologies that we would otherwise have attempted to
develop and commercialize on our own which could reduce our potential revenues.

BECAUSE OF THE NATURE OF OUR BUSINESS, THE LOSS OF KEY MEMBERS OF OUR
MANAGEMENT TEAM COULD DELAY ACHIEVEMENT OF OUR GOALS.

We are a small company with only 85 employees, including 2 part-time
employees as of December 31, 2006. We are highly dependent on several key
officer/employees with specialized scientific and technical skills without whom
our business, financial condition and results of operations would suffer,
especially in the photodynamic therapy portion of our business. The photodynamic
therapy industry is still quite small and the number of experts is limited. The
loss of these key employees could cause significant delays in achievement of our
business and research goals since very few people with their expertise could be
hired. Our growth and future success will depend, in large part, on the
continued contributions of these key individuals as well as our ability to
motivate and retain other qualified personnel in our specialty drug and light
device areas.

OUR COLLABORATIONS WITH OUTSIDE SCIENTISTS MAY BE SUBJECT TO RESTRICTION AND
CHANGE.

We work with scientific and clinical advisors and collaborators at academic
and other institutions that assist us in our research and development efforts.
These scientists and advisors are not our employees and may have other
commitments that limit their availability to us. Although our advisors and
collaborators generally agree not to do competing work, if a conflict of
interest between their work for us and their work for another entity arises, we
may lose their services. In addition, although our advisors and collaborators
sign agreements not to disclose our confidential information, it is possible
that valuable proprietary knowledge may become publicly known through them.

RISKS RELATED TO OUR INDUSTRY

PRODUCT LIABILITY AND OTHER CLAIMS AGAINST US MAY REDUCE DEMAND FOR OUR PRODUCTS
OR RESULT IN DAMAGES.

WE ARE SUBJECT TO RISK FROM POTENTIAL PRODUCT LIABILITY LAWSUITS WHICH
COULD NEGATIVELY AFFECT OUR BUSINESS.

The development, manufacture and sale of medical products exposes us to
product liability claims related to the use or misuse of our products. Product
liability claims can be expensive to defend and may result in significant
judgments against us. A successful claim in excess of our insurance coverage
could materially harm our business, financial condition and results of
operations. Additionally, we cannot guarantee that continued product liability
insurance coverage will be available in the future at acceptable costs. If the
cost is too high, we may have to self-insure.

OUR BUSINESS INVOLVES ENVIRONMENTAL RISKS AND WE MAY INCUR SIGNIFICANT
COSTS COMPLYING WITH ENVIRONMENTAL LAWS AND REGULATIONS.

We have used various hazardous materials, such as mercury in fluorescent
tubes in our research and development activities. We are subject to federal,
state and local laws and regulations which govern the use, manufacture, storage,
handling and disposal of hazardous materials and specific waste products. Now
that we have established our own production line for the manufacture of the
Kerastick(R), wE are subject to additional environmental laws and regulations.
We believe that we are in compliance in all material respects with currently
applicable environmental laws and regulations. However, we cannot guarantee that
we will not incur significant costs to comply with environmental laws and
regulations in the future. We also cannot guarantee that current or future
environmental laws or regulations will not materially adversely affect our
operations, business or assets. In addition, although we believe our safety
procedures for handling and disposing of these materials comply with federal,
state and local laws and regulations, we cannot completely eliminate the risk of
accidental contamination or injury from these materials. In the event of such an
accident, we could be held liable for any resulting damages, and this liability
could exceed our resources.

WE MAY NOT BE ABLE TO COMPETE AGAINST TRADITIONAL TREATMENT METHODS OR KEEP UP
WITH RAPID CHANGES IN THE BIOTECHNOLOGY AND PHARMACEUTICAL INDUSTRIES THAT COULD
MAKE SOME OR ALL OF OUR PRODUCTS NON-COMPETITIVE OR OBSOLETE.

COMPETING PRODUCTS AND TECHNOLOGIES BASED ON TRADITIONAL TREATMENT METHODS
MAY MAKE SOME OR ALL OF OUR PROGRAMS OR POTENTIAL PRODUCTS NONCOMPETITIVE
OR OBSOLETE.

Well-known pharmaceutical, biotechnology and medical device companies are
marketing well-established therapies for the treatment of many of the same
conditions that we are seeking to treat, including AKs, acne, rosacea, and
Barrett's Esophagus. Doctors may prefer to use familiar methods, rather than
trying our products. Reimbursement issues affect the economic competitiveness of
our products as compared to other more traditional therapies.

Many companies are also seeking to develop new products and technologies,
and receiving approval for medical conditions for which we are developing
treatments. Our industry is subject to rapid, unpredictable and significant
technological change. Competition is intense. Our competitors may succeed in
developing products that are safer or more effective than ours. Many of our
competitors have substantially greater financial, technical and marketing
resources than we have. In addition, several of these companies have
significantly greater experience than we do in developing products, conducting
preclinical and clinical testing and obtaining regulatory approvals to market
products for health care.

We cannot guarantee that new drugs or future developments in drug
technologies will not have a material adverse effect on our business. Increased
competition could result in:

- price reductions,

- lower levels of third-party reimbursements,

- failure to achieve market acceptance, and

- loss of market share, any of which could adversely affect our
business. Further, we cannot give any assurance that developments by
our competitors or future competitors will not render our technology
obsolete.

On May 30, 2006, we entered into a patent license agreement with PhotoCure
ASA whereby DUSA granted a non-exclusive license to PhotoCure under the patents
DUSA licenses from PARTEQ, the licensing arm of Queens University, Kingston,
Ontario Canada for esters of aminolevulinic acid ("ALA"). ALA is the active
ingredient in DUSA's Levulan(R) products. Furthermore, DUSA granted a
non-exclusivE license to PhotoCure for its existing formulations of its
Hexvix(R) and Metvix(R) (known in the United States as Metvixia(R)) products for
any DUSA patents that may issue or be licensed by DUSA in the fuTURE. PhotoCure
received FDA approval to market Metvixia for treatment of AKs in July 2004 and
it would be directly competitive with our Levulan(R) Kerastick(R) product should
PhotoCure decide to begin marketing tHIS product. While we are entitled to
royalties from PhotoCure on its net sales of Metvixia, this product may
adversely affect our ability to maintain or increase our market.

OUR PRODUCTS MAY LOSE MARKET SHARE IF NEW MANUFACTURERS BEGIN PRODUCING
COMPETING PRODUCTS THAT ARE ABLE TO PENETRATE OUR MARKET.

WE HAVE LEARNED THAT COMPOUNDING PHARMACIES ARE PRODUCING A FORM OF
AMINOLEVULINIC ACID HCL AND ARE MARKETING IT TO THE MEDICAL COMMUNITY.

We are aware that there are compounding pharmacies that market compounded
versions of aminolevulinic acid HCl as an alternative to our Levulan(R) product.
Since December 2004, we filed lawsuitS against two compounding pharmacies and
physicians in several states alleging violations of the Lanham Act for false
advertising and trademark infringement, and of United States patent law. All of
these lawsuits have been settled favorably to us. More recently, we have sued
chemical suppliers, and a light device company, its distributor and a sales
representative, alleging that they induce physicians to infringe patents
licensed to us, among other things. While we believe that

certain actions of compounding pharmacies and others go beyond the activities
which are permitted under the Food, Drug and Cosmetic Act and have advised the
FDA and local health authorities of our concerns, we cannot be certain that our
lawsuits will be successful in curbing the practices of these companies or that
regulatory authorities will intervene to stop their activities. In addition,
there may be other compounding pharmacies which are following FDA guidelines, or
others conducting illegal activities of which we are not aware, which may be
negatively impacting our sales revenues.

If generic manufacturers, like River's Edge, launch products to compete
with Nicomide(R) in spite of our patent position, or if a court or the United
States Patent and Trademark Office determinE that our patent is invalid, these
manufacturers may erode our market and negatively impact our sales revenues,
liquidity and operations.

OUR COMPETITORS IN THE BIOTECHNOLOGY AND PHARMACEUTICAL INDUSTRIES MAY HAVE
BETTER PRODUCTS, MANUFACTURING CAPABILITIES OR MARKETING EXPERTISE.

We anticipate that we will face increased competition as the scientific
development of PDT and PD advances and new companies enter our markets. Several
companies are developing PDT agents other than Levulan(R). These include: QLT
Inc. (Canada); Axcan Pharma Inc. (U.S.); Miravant, Inc. (U.S.); and
Pharmacyclics, Inc. (U.S.). We are also aware of several companies
commercializing and/oR conducting research with ALA or ALA-related compounds,
including: medac GmbH and photonamic GmbH & Co. KG (Germany); PhotoTherapeutics,
Inc. (U.K.) and PhotoCure ASA (Norway) which entered into a marketing agreement
with Galderma S.A. for countries outside of Nordic countries for certain
dermatology indications. There are many pharmaceutical companies that compete
with us in the field of dermatology, particularly in the acne and rosacea
markets.

PhotoCure has received marketing approval of its ALA precursor (ALA
methyl-ester) compound for PDT treatment of AKs and basal cell carcinoma in the
European Union, New Zealand, Australia and countries in Scandinavia. PhotoCure's
marketing partner could begin to market its product in direct competition with
Levulan(R) in the U.S. under the terms of our recently entered patent license
agreement anD we may lose market share.

Axcan Pharma Inc. has received FDA approval for the use of its product,
PHOTOFRIN(R), for PDT in the treatment of high grade dysplasia associated with
Barrett's Esophagus. Axcan is the firsT company to market a PDT therapy for this
indication, which we are also pursuing.

We expect that our principal methods of competition with other PDT
companies will be based upon such factors as:

- the ease of administration of our method of PDT,

- the degree of generalized skin sensitivity to light,

- the number of required doses,

- the selectivity of our drug for the target lesion or tissue of
interest, and

- the type and cost of our light systems.

Our primary competition in the acne and rosacea markets include oral and
topical antibiotics, other topical prescription and over-the-counter products,
as well as various laser and non-laser light treatments. The market is highly
competitive and other large and small companies have more experience than we do
which could make it difficult for us to penetrate the market. We are also aware
of new products that were launched recently which will compete with Nicomide(R)
and the AVAR(R) line of products which could negatively impact our market share.
In addition, we expect that River's Edge's geneRIC Nicomide(R) product will
enter the market quickly, and other generic companies may also decide to enter
the market while our patent litigation and reexamination process are proceeding,
or thereafter if thE court or if the USPTO finds that our Nicomide patent is
invalid. The entry of new products from time to time would likely cause us to
lose market share.

RISKS RELATED TO OUR STOCK

IF THE SHARES OF COMMON STOCK HELD BY FORMER SIRIUS SHAREHOLDERS ARE SOLD,
THE PRICE OF THE SHARES COULD BECOME DEPRESSED

All of the shares of DUSA's common stock which were issued to the former
Sirius shareholders have been subject to a lock-up provision under the terms of
the merger agreement. On March 10, 2007, the lock-up provision on 1,380,151
shares was lifted. These shares have been registered and are freely tradable. If
these shareholders decide to sell their shares, the price of the shares on
NASDAQ could be depressed.

IF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS ARE CONVERTED, THE VALUE OF
THOSE SHARES OF COMMON STOCK OUTSTANDING JUST PRIOR TO THE CONVERSION WILL
BE DILUTED.

As of December 31, 2006 there were outstanding options and warrants to
purchase 3,031,000 shares of common stock, with exercise prices ranging from
U.S. $1.60 to $31.00 per share, and of CDN $6.79 per share, respectively. The
holders of the options and warrants have the opportunity to profit if the market
price for the common stock exceeds the exercise price of their respective
securities, without assuming the risk of ownership. The holders are likely to
exercise their securities when we would probably be able to raise capital from
the public on terms more favorable than those provided in these securities.

RESULTS OF OUR OPERATIONS AND GENERAL MARKET CONDITIONS FOR SPECIALTY
PHARMACEUTICAL AND BIOTECHNOLOGY STOCKS COULD RESULT IN SUDDEN CHANGES IN
THE MARKET VALUE OF OUR STOCK.

The price of our common stock has been highly volatile. These fluctuations
create a greater risk of capital losses for our shareholders as compared to less
volatile stocks. From January 1, 2005 to December 31, 2006, the price of our
stock has ranged from a low of $3.52 to a high of $16.30. Factors that
contributed to the volatility of our stock during this period included:

- quarterly levels of product sales;

- clinical trial results;

- general market conditions;

- patent litigation;

- increased marketing activities; and

- changes in third-party payor reimbursement for our therapy.

The significant general market volatility in similar stage pharmaceutical
and biotechnology companies made the market price of our common stock even more
volatile.

SIGNIFICANT FLUCTUATIONS IN ORDERS FOR OUR PRODUCTS, ON A MONTHLY AND
QUARTERLY BASIS, ARE COMMON BASED ON EXTERNAL FACTORS AND SALES PROMOTION
ACTIVITIES. THESE FLUCTUATIONS COULD INCREASE THE VOLATILITY OF OUR STOCK
PRICE.

The price of our common stock may be affected by the amount of quarterly
shipments of our products to end-users. Since our PDT products are still in the
early stages of adoption, and sales volumes are still low, a number of factors
could affect product sales levels and growth rates in any period. These could
include the timing of medical conferences, sales promotion activities, and large
volume purchases by our higher usage customers. In addition, seasonal
fluctuations in the number of patients seeking treatment at various times during
the year could impact sales volumes. These factors could, in turn, affect the
volatility of our stock price.

EFFECTING A CHANGE OF CONTROL OF DUSA WOULD BE DIFFICULT, WHICH MAY
DISCOURAGE OFFERS FOR SHARES OF OUR COMMON STOCK.

Our certificate of incorporation authorizes the board of directors to issue
up to 100,000,000 shares of stock, 40,000,000 of which are common stock. The
board of directors has the authority to determine the price, rights, preferences
and privileges, including voting rights, of the remaining 60,000,000 shares
without any further vote or action by the shareholders. 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 preferred stock that may be issued in the
future.

On September 27, 2002, we adopted a shareholder rights plan at a special
meeting of DUSA's board of directors. The rights plan could discourage, delay or
prevent a person or group from acquiring 15% or more (or 20% or more in the case
of certain parties) of our common stock, thereby limiting, perhaps, the ability
of our shareholders to benefit from such a transaction.

The rights plan provides for the distribution of one right as a dividend
for each outstanding share of our common stock to holders of record as of
October 10, 2002. Each right entitles the registered holder to purchase one
one-thousandths of a share of preferred stock at an exercise price of $37.00 per
right. The rights will be exercisable subsequent to the date that a person or
group either has acquired, obtained the right to acquire, or commences or
discloses an intention to commence a tender offer to acquire, 15% or more of our
outstanding common stock (or 20% of the outstanding common stock in the case of
a shareholder or group who beneficially held in excess of 15% at the record
date), or if a person or group is declared an "Adverse Person", as such term is
defined in the rights plan. The rights may be redeemed by DUSA at a redemption
price of one one-hundredth of a cent per right until ten days following the date
the person or group acquires, or discloses an intention to acquire, 15% or 20%
or more, as the case may be, of DUSA, or until such later date as may be
determined by the our board of directors.

Under the rights plan, if a person or group acquires the threshold amount
of common stock, all holders of rights (other than the acquiring person or
group) may, upon payment of the purchase price then in effect, purchase shares
of common stock of DUSA having a value of twice the purchase price. In the event
that we are involved in a merger or other similar transaction where DUSA is not
the surviving corporation, all holders of rights (other than the acquiring
person or group) shall be entitled, upon payment of the purchase price then in
effect, to purchase common stock of the surviving corporation having a value of
twice the purchase price. The rights will expire on October 10, 2012, unless
previously redeemed. Our board of directors has also adopted certain amendments
to DUSA's certificate of incorporation consistent with the terms of the rights
plan.

USE OF PROCEEDS

DUSA will not receive any proceeds from the sale of shares which may be
sold pursuant to this prospectus for the respective accounts of the selling
securityholders. All such proceeds, net of brokerage commissions, if any, will
be received by the selling securityholders. See the sections titled "Selling
Securityholders" and "Plan of Distribution."

SELLING SECURITYHOLDERS

This prospectus relates to shares of common stock to be offered by the
selling securityholders pursuant to stock options issued by us. The inclusion in
the table of the individuals named therein shall not be deemed to be an
admission that any such individuals are "affiliates" of DUSA.

The following is a list, as of February 28, 2007, of the selling
securityholders and the number of shares held by each selling securityholder.

NUMBER OF NUMBER OF NUMBER OF PERCENTAGE OF
SHARES SHARES TO BE SHARES OWNED SHARES OWNED
NAME OWNED(1) OFFERED(2) AFTER OFFERING(3) AFTER OFFERING
---- --------- ------------ ----------------- --------------

John H. Abeles (4) 99,500 10,000 89,500 *
David M. Bartash (5) 80,500 10,000 70,500 *
Mark Carota (6) 91,875 20,000 91,875 *
Jay M. Haft (7) 129,500 10,000 119,500 *
Richard C. Lufkin (8) 117,100 10,000 107,100 *
Richard C. Christopher (9) 57,000 20,000 57,000 *
Robert F. Doman (10) 64,500 60,000 64,500 *
Scott L. Lundahl (11) 148,332 20,000 148,332 *
Stuart L. Marcus (12) 158,125 20,000 158,125 *
Magnus Moliteus (13) 45,000 10,000 35,000 *
William F. O'Dell (14) 12,500 25,000 12,5000 *
Neal S. Penneys (15) 47,445 10,000 37,445 *
D. Geoffrey Shulman (16) 1,056,418 325,000 1,056,418 5.4%
Michael J. Todisco (17) 6,000 35,000 6,000 *

* Less than one percent.

(1) Represents shares beneficially owned by the named individual including
shares that such individual has the right to acquire upon exercise of
options or warrants vesting within sixty (60) days of February 28, 2007,
but does not include shares underlying options which vest more than sixty
(60) days from such date. Unless otherwise noted, all persons referred to
above have sole voting and sole investment power.

(2) Includes all outstanding options to purchase shares of common stock granted
to the named individuals under the 2006 Equity Compensation Plan or the
Class B Warrant whether or not vested or exercisable within sixty (60) days
of the date set forth above. All of such shares are being registered
hereunder.

(3) Does not constitute a commitment to sell any or all of the stated number of
shares of common stock. The number of shares offered shall be determined
from time to time by each selling securityholder at their sole discretion.

(4) Dr. Abeles has served as a director since August 1994. Beneficial ownership
includes 34,500 shares of common stock and 65,000 shares of common stock
underlying stock options granted to Dr. Abeles which will have vested
within sixty (60) days after February 28, 2007. Dr. Abeles shares
investment and voting power with regard to the 24,500 shares of common
stock.

(5) Mr. Bartash has served as a director since November 2001. Beneficial
ownership includes 15,500 shares of common stock and 65,000 shares of
common stock underlying stock options granted to Mr. Bartash which will
have vested within sixty (60) days after February 28, 2007.

(6) Mr. Carota joined us in October 1999 and was elected as our Vice President,
Operations in February 2000. Beneficial ownership includes 91,875 shares of
common stock underlying stock options granted to Mr. Carota which will have
vested within sixty (60) days after February 28, 2007. The number of shares
owned does not include 47,500 shares of common stock underlying stock
options granted to Mr. Carota which will vest more than sixty (60) days
after February 28, 2007.

(7) Mr. Haft has served as a director since September 1996. He served as
Chairman of the Board and Lead Director from June 2003 to January 3, 2005.
As of January 3, 2005, he serves as Vice Chairman of the Board and Lead
Director. Beneficial ownership includes 34,500 shares of common stock and
88,750 shares of common stock underlying stock options granted to Mr. Haft
which will have vested within sixty (60) days after February 28, 2007.
Under Rule 13d-3 of the Securities and Exchange Act of 1934, as amended,
Mr. Haft disclaims, but may be deemed to be the beneficial owner of, the
34,500 shares of common stock held indirectly by Mr. Haft's spouse.

(8) Mr. Lufkin has served as a director since January 1992. Beneficial
ownership includes 12,100 shares of common stock and 105,000 shares of
common stock underlying stock options granted to Mr. Lufkin which will have
vested within sixty (60) days after February 28, 2007.

(9) Mr. Christopher joined us in December 2000 and was appointed to the
position of Vice President, Finance and Chief Financial Officer effective
February 16, 2005. Before that, Mr. Christopher served as our Vice
President, Financial Planning and Business Analysis and had also served as
our Director, Financial Analysis. Beneficial ownership includes 57,000
shares of common stock underlying stock options granted to Mr. Christopher
which will have vested within sixty (60) days after February 28, 2007. The
number of shares owned does not include 52,500 shares of common stock
underlying stock options granted to Mr. Christopher which will vest more
than sixty (60) days after February 28, 2007.

(10) Mr. Doman joined us as our new President and Chief Operating Officer
effective January 3, 2005. Beneficial ownership includes 2,000 shares of
common stock and 62,500 shares of common stock underlying options granted
to Mr. Doman which will have vested within sixty (60) days after February
28, 2007. The number of shares owned does not include 147,500 shares of
common stock underlying stock options which will vest more than sixty (60)
days after February 28, 2007.

(11) Mr. Lundahl joined us in May 1998 and was elected as our Vice President,
Regulatory Affairs and Intellectual Property in June 2003. Before that, Mr.
Lundahl was our Vice President, Technology and Device Development from June
1999 until June 2003. Beneficial ownership includes 5,207 shares of common
stock and 143,125 shares of common stock underlying stock options granted
to Mr. Lundahl which will have vested within sixty (60) days after February
28, 2007. The number of shares owned does not include 36,925 shares of
common stock underlying stock options granted to Mr. Lundahl which will
vest more than sixty (60) days after February 28, 2007.

(12) Dr. Marcus was elected as our Vice President, Scientific Affairs and Chief
Medical Officer in October 1993. Beneficial ownership includes 158,125
shares of common stock underlying stock options granted to Dr. Marcus which
will have vested within sixty (60) days after February 28, 2007. The number
of shares owned does not include 48,750 shares of common stock underlying
stock options granted to Dr. Marcus which will vest more than sixty (60)
days after February 28, 2007.

(13) Mr. Moliteus has served as a director since August 2003. Beneficial
ownership includes 45,000 shares of common stock underlying stock options
granted to Mr. Moliteus which will have vested within sixty (60) days after
February 28, 2007.

(14) Mr. O'Dell joined us as our Executive Vice President Sales and Marketing on
April 4, 2006. Beneficial ownership includes 12,500 shares of common stock
underlying stock options granted to Mr. O'Dell which will have vested
within sixty (60) days after February 28, 2007. This number does not
include 62,500 shares of common stock underlying stock options which will
vest more than sixty (60) days after February 28, 2007.

(15) Dr. Penneys has been served as a director since March 2006 upon the
consummation of the merger with Sirius Laboratories, Inc. Beneficial
ownership includes 22,445 shares of common stock and 25,000 shares of
common stock underlying stock options granted to Dr. Penneys which will
have vested within sixty (60) days after February 28, 2007. Dr. Penneys
shares investment and voting power with regard to 10,663 shares.

(16) Dr. Shulman is our founder and has served as director and Chief Executive
Officer since September 1991 and formerly served as our President and
Chairman of the Board at various times since our inception. In January
2005, Dr. Shulman was re-appointed Chairman upon Mr. Doman's appointment as
President. Beneficial ownership includes 87,668 shares of common stock,
718,750 shares of common stock underlying stock options and 250,000 shares
of common stock underlying a warrant granted to Dr. Shulman which will have
vested within sixty (60) days after February 28, 2007. The number of shares
owned does not include 181,250 shares of common stock underlying stock
options granted to Dr. Shulman which will vest more than sixty (60) days
after February 28, 2007.

(17) Mr. Todisco has served as Vice President, Controller since September 2006.
Beneficial ownership includes 6,000 shares of common stock underlying stock
options granted to Mr. Todisco which will have vested within sixty (60)
days after February 28, 2007.

PLAN OF DISTRIBUTION

Shares offered hereby may be sold from time to time directly by or on
behalf of the selling securityholders in one or more transactions on the Nasdaq
Global Market or on any stock exchange on which the common stock may be listed
at the time of sale, in privately negotiated transactions, or through a
combination of such methods, at market prices prevailing at the time of sale, at
prices related to such prevailing market prices, at fixed prices (which may be
changed) or at negotiated prices. The selling securityholders may sell shares
through one or more agents, brokers or dealers or directly to purchasers. Such
brokers or dealers may receive compensation in the form of commissions,
discounts or concessions from the selling securityholders and/or purchasers of
the shares or both (which compensation as to a particular broker or dealer may
be in excess of customary commissions).

In connection with such sales, the selling securityholders and any
participating broker or dealer may be deemed to be "underwriters" within the
meaning of the Securities Act of 1933, as amended (the "Securities Act"), and
any commissions they receive and the proceeds of any sale of shares may be
deemed to be underwriting discounts and commissions under the Securities Act.

In order to comply with certain state securities laws, if applicable, the
shares may be sold in such jurisdictions only through registered or licensed
brokers or dealers. In certain states, the shares may not be sold unless the
shares have been registered or qualified for sale in such state or an exemption
from regulation or qualification is available and is complied with. Sales of
shares must also be made by the selling securityholders in compliance with all
other applicable state securities laws and regulations.

In addition to any shares sold hereunder, selling securityholders may, at
the same time, sell any shares of common stock owned by them in compliance with
all of the requirements of Rule 144, regardless of whether such shares are
covered by this reoffer prospectus. There can be no assurance that any of the
selling securityholders will sell any or all of the shares offered by them
hereby.

DUSA will pay all expenses of the registration of the shares. DUSA has
notified certain selling securityholders of the need to deliver a copy of this
reoffer prospectus in connection with any sale of the shares.

LEGAL MATTERS

The validity of the shares being offered hereby has been passed upon for
DUSA by Reed Smith LLP. Nanette W. Mantell, Esq., a partner of Reed Smith LLP,
serves as DUSA's Secretary, which is an officer position.

EXPERTS

The consolidated financial statements and management's report on the
effectiveness of internal control over financial reporting incorporated in this
prospectus by reference from DUSA's Annual Report on Form 10-K for the year
ended December 31, 2006 have been audited by Deloitte & Touche LLP, an
independent registered public accounting firm as stated in their reports, (which
reports (1) express an unqualified opinion on the financial statements and
includes an explanatory paragraph relating to the change in method of accounting
for share-based payments upon the adoption of Statement of Financial Accounting
Standards No. 123(R), Share-Based Payment, effective January 1, 2006, (2)
express an unqualified opinion on management's assessment regarding the
effectiveness of internal control over financial reporting, and (3) express an
unqualified opinion on the effectiveness of internal control over financial
reporting), which are incorporated herein by reference, and have been so
incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the Securities and Exchange Commission a registration
statement on Form S-8 under the Securities Act with respect to the shares of
common stock offered hereby. This prospectus does not contain all of the
information set forth in the registration statement and the exhibits thereto.
You can find additional information regarding us and the common stock in the
registration statement and the exhibits. Statements contained in this prospectus
regarding the contents of any contract or any other document to which reference
is made are not necessarily complete, and, in each instance where a copy of such
contract or other document has been filed as an exhibit to the registration
statement, reference is made to the copy so filed, each such statement being
qualified in all respects by such reference.

We are subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and, in accordance therewith, file
reports and other information with the Commission. The registration statement,
including exhibits, and the reports and other information filed by us can be
inspected without charge at the public reference facilities maintained by the
Commission at the Securities and Exchange Commission's public reference room at
450 Fifth Street, N.W., Washington, D.C., 20549. Copies of such material can be
obtained from such offices at fees prescribed by the Commission. The public may
obtain information on the operation of the Public Reference room by calling the
Commission at 1-800-SEC-0330. The Commission maintains a World Wide Web site
that contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission. The address
of this site is http://www.sec.gov. In addition, you can also access documents
we file with the Commission at our website, http://www.dusapharma.com.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents, which have been filed by us with the Commission
pursuant to the Exchange Act, are incorporated by reference in this prospectus
as of their respective dates:

(a) The Annual Report on Form 10-K for the year ended December 31, 2006;

(b) The Current Report on Form 8-K filed with the Commission on March 19,
2007; and

(d) The description of DUSA's common stock contained in its registration
statement on Form 8-A which was filed on January 3, 1992 and amended
on October 24, 1997 and in DUSA's report on Form 10-Q which was filed
on November 12, 1997.

All documents filed by us pursuant to Section 13(a), 13(c), 14 and 15(d) of
the Exchange Act after the date hereof and prior to the termination of the
offering shall be deemed to be incorporated by reference into this prospectus
and to be a part hereof from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated herein by
reference shall be deemed to be modified or superseded for purposes of this
prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement.

We will provide without charge to any person, including any beneficial
owner, to whom this prospectus is

delivered, upon written or oral request of such person, a copy of each document
incorporated by reference in the prospectus (other than exhibits to such
documents unless such exhibits are specifically incorporated by reference into
this prospectus). We will provide such copies at no cost, upon written or oral
request, by writing or telephoning us at:

DUSA PHARMACEUTICALS, INC.
555 RICHMOND STREET WEST
SUITE 300, P.O. BOX 704
TORONTO, ONTARIO, CANADA
M5V 3B1
ATTENTION: MS. SHARI LOVELL
TELEPHONE: (800) 607-2530
E-MAIL TO: LOVELLS@DUSAPHARMA.COM

Our World Wide Web site is located at www.dusapharma.com. Information on
the Web site is not incorporated by reference into this prospectus.

================================================================================

335,000 SHARES

DUSA
PHARMACEUTICALS, INC. (R)

Common Stock

----------

PROSPECTUS

----------

March __, 2007

================================================================================

PART II
INFORMATION REQUIRED TO BE IN THE REGISTRATION STATEMENT

ITEM 3. Incorporation of Documents by Reference

DUSA hereby incorporates by reference in this registration statement the
following documents previously filed by the registrant with the SEC:

- Annual Report on Form 10-K for the year ended December 31, 2006.

- Current Report on Form 8-K filed with the SEC on March 19, 2007.

- The description of DUSA's common stock contained in its registration
statement on Form 8-A which was filed on January 3, 1992, amended on
October 24, 1997 (and in DUSA's Quarterly Report on Form 10-Q which
was filed on November 12, 1997).

- All documents subsequently filed by DUSA pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act of 1934, as amended, on or
after the date of this registration statement and prior to the filing
of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then
remaining unsold shall be deemed to be incorporated by reference in
this registration statement and to be part hereof from the date of
filing of such documents.

ITEM 4. Description of Securities

Not applicable.

ITEM 5. Interests of Named Experts and Counsel

Not applicable.

ITEM 6. Indemnification of Directors and Officers

Article 5 of the Company's Certificate of Incorporation, as amended, and New
Jersey Business Corporation Act, N.J.S.A. 14A:2-7 provide as follows:

Any director and officer of the Corporation shall not be personally liable to
the Corporation or its shareholders for damages for breach of any duty owed to
the Corporation or its shareholders, except that this provision shall not
relieve a director or officer from liability for any breach of duty based upon
an act or omission (a) in breach of such person's duty of loyalty to the
Corporation or its shareholders; (b) not in good faith or involving a knowing
violation of law; or (c) resulting in receipt by such person of an improper
personal benefit.

The Company's By-laws, as amended, pursuant to the New Jersey Business
Corporation Act, N.J.S.A. 14A:3-5, provide as follows:

ARTICLE IV
INDEMNIFICATION

Section 1. Actions by Others. The Corporation (1) shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Corporation) by reason of the fact that he is or was a director,
officer or trustee of the Corporation or of any constituent corporation absorbed
by the Corporation in a consolidation or merger and (2) except

II-1

as otherwise required by Section 3 of this Article, may indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the Corporation) by
reason of the fact that he (a) is or was an employee or agent or the legal
representative of a director, officer, trustee, employee or agent of the
Corporation or of any absorbed constituent corporation, or (b) is or was serving
at the request of the Corporation or of any absorbed constituent corporation as
a director, officer, employee, agent of or participant in another corporation,
partnership, joint venture, trust or other enterprise, or the legal
representative of such a person against expenses, costs, disbursements
(including attorneys' fees), judgments, fines and amounts actually and
reasonably incurred by him in good faith and in connection with such action,
suit or proceeding if he acted in a manner he reasonably believed to be in or
not opposed to the best interests of the Corporation, and with respect to any
criminal action or proceeding, he had no reasonable cause to believe that his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a pleas of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not meet the applicable standard of conduct.

Section 2. Actions by or in the Right of the Corporation. The Corporation
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the right
of the Corporation to procure a judgment in its favor by reason of the fact that
he is or was a director, officer, trustee, employee or agent of the Corporation
or of any constituent corporation absorbed by the Corporation by consolidation
or merger, or the legal representative of any such person, or is or was serving
at the request of the Corporation or of any absorbed constituent corporation, as
a director, officer, trustee, employee, agent of or participant, or the legal
representative of any such person in another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the Corporation unless and only to the extent that the New Jersey
Superior Court or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the New Jersey Superior Court or
such other court shall deem proper.

Section 3. Successful Defense. To the extent that a person who is or was a
director, officer, trustee, employee or agent of the Corporation or of any
constituent corporation absorbed by the Corporation by consolidation or merger,
or the legal representative of any such person, has been successful on the
merits or otherwise in defense of any action, suit or proceeding referred to in
Section 1 or Section 2 of this Article, or in defense of any claim, issue, or
matter therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith.

Section 4. Specific Authorization. Any indemnification under Section 1 or
Section 2 of this Article (unless ordered by a court) shall be made by the
Corporation only as authorized in the specific case upon a determination that
indemnification of the director, officer, trustee, employee, agent, or the legal
representative thereof, is proper in the circumstances because he has met the
applicable standard of conduct set forth in said Sections 1 and 2. Such
determination shall be made (1) by the Board of Directors by a majority vote of
quorum consisting of directors who were not parties to such action, suit or
proceeding, or (2) if such a quorum is not obtainable, a quorum of disinterested
directors so directs, by independent legal counsel for a written opinion, (3) by
the shareholders.

Section 5. Advance of Expenses. Expenses incurred by any person who may
have a right of indemnification under this Article in defending civil or
criminal action, suit or proceeding may be paid by the Corporation in advance of
the final distribution of such action, suit or proceeding as authorized by the
board of directors upon receipt of an undertaking by or on behalf of the
director, officer, trustee, employee, or the legal representative thereof, to
repay such amount unless it shall ultimately be determined that he is entitled
to be indemnified by the Corporation pursuant to this Article.

II-2

Section 6. Right of Indemnity not Exclusive. The indemnification and
advancement of expenses provided by this Article shall not exclude any other
rights to which those seeking indemnification may be entitled under the
certificate of incorporation of the Corporation or any by-law, agreement, vote
of shareholders or otherwise; provided that no indemnification shall be made to
or on behalf of a Director, officer, trustee, employee, agent, or legal
representative if a judgment or other final adjudication adverse to such persons
establishes that his acts or omissions (a) were in breach of his duty of loyalty
to the corporation or its shareholders, (b) were not in good faith or involved a
knowing violation of law or (c) resulted in receipt by such person of an
improper personal benefit.

Section 7. Insurance. The Corporation may purchase and maintain insurance
on behalf of any person who is or was a director, officer, trustee, employee or
agent of the Corporation or of any constituent corporation absorbed by the
Corporation by consolidation or merger of the legal representative of such
person or is or was serving at the request of the Corporation or of any absorbed
constituent corporation as a director, officer, trustee, employee or agent of or
participant in another corporation, partnership, joint venture, trust or other
enterprise, or the legal representative of any such person against any liability
asserted against him and incurred by him in any such capacity, arising out of
his status as such or by reason of his being or having been such, whether or not
the Corporation would have the power to indemnify him against such liability
under the provisions of this Article, the New Jersey Business Corporation Act,
or otherwise.

Section 8. Invalidity of any Provision of this Article. The invalidity or
unenforceability of any provision of this Article shall not affect the validity
or enforceability of the remaining provisions of this Article.

ITEM 7. Exemption from registration Claimed.

Not applicable.

ITEM 8. Exhibits

(4) Instruments defining the rights of security holders

(4.1) DUSA Pharmaceuticals, Inc. 2006 Equity Compensation Plan

(4.2) DUSA Pharmaceuticals, Inc. Non-Qualified Deferred Compensation
Plan

(4.3) Class B Warrant incorporated by reference from Exhibit 4(b) to
Registrant's Form 10-K for the year ended December 31, 2006 filed
on March 16, 2007.

(5) Opinion re: legality

(5.1) Opinion of Reed Smith LLP.

(23) Consents of experts and counsel

(23.1) Consent of Deloitte and Touche LLP

(23.2) Consent of Reed Smith LLP, included in Exhibit 5.1

(24) Power of attorney

(24.1) Power of Attorney (included on signature page)

(99) Additional Exhibits

(99.1) Form of Nonqualified Stock Option Grant Agreement

(99.2) Form of Incentive Stock Option Grant Agreement

(99.3) Form of Stock Award Grant Agreement

ITEM 9. Undertakings

(a) The undersigned registrant hereby undertakes:

II-3

(1) to file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:

(i) to include in any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;

(ii) to reflect in the prospectus any facts or events arising after the
effective date of this registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in this registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
offering price set forth in the "Calculation of Registration Fee" table in the
effective registration statement;

(iii) to include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or any
material change to such information in this registration statement; provided,
however, that paragraphs (1)(i), (1)(ii) and (1)(iii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports is contained in periodic reports
filed with or furnished to the Commission by the registrant pursuant to Section
13 or 15(d) of the Exchange Act that are incorporated by reference in the
registration statement.

(2) that, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

(3) to remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.

(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13 (a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

II-4

SIGNATURES

THE REGISTRANT:. Pursuant to the requirements of the Securities Act of
1933, as amended, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-8 and has
duly caused this Registration Statement on Form S-8 to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Wilmington,
Commonwealth of Massachusetts, on this 28th day of March 2007.

DUSA Pharmaceuticals, Inc.
Registrant

By: /s/ D. Geoffrey Shulman
------------------------------------
D. Geoffrey Shulman, MD, FRCPC
Chief Executive Officer

POWER OF ATTORNEY

Know All Men By These Presents, that each person whose signature appears
below constitutes and appoints D. Geoffrey Shulman as his/her true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution,
for him/her and in his/her name, place and stead, in any and all capacities, to
sign any or all amendments (including post-effective amendments) to this
registration statement or any related registration statement that is to be
effective upon filing pursuant to Rule 462(b), and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection with the above premises, as
fully to all intents and purposes as he/she might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent or his/her
substitute or substitutes, may lawfully do or cause to be done by virtue
thereof.

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement on Form S-8 has been signed by the following persons
in the capacities and on the dates indicated:

/s/ D. Geoffrey Shulman Director, Chairman of the Board and March 28, 2007
------------------------------ Chief Executive Officer Date
D. Geoffrey Shulman, MD, (principal executive officer)
FRCPC

/s/ Robert F. Doman Director, President and Chief March 28, 2007
------------------------------ Operating Officer Date
Robert F. Doman

/s/ Richard C. Christopher Vice President, Finance and Chief March 28, 2007
------------------------------ Financial Officer (principal Date
Richard C. Christopher financial officer and principal
accounting officer)

/s/ Jay M. Haft Vice Chairman of the Board and Lead March 28, 2007
------------------------------ Director Date
Jay M. Haft, Esq.

/s/ John H. Abeles Director March 28, 2007
------------------------------ Date
John H. Abeles, MD

/s/ Richard C. Lufkin Director March 28, 2007
------------------------------ Date
Richard C. Lufkin, SB, MBA

/s/ David M. Bartash Director March 28, 2007
------------------------------ Date
David M. Bartash

/s/ Magnus Moliteus Director March 28, 2007
------------------------------ Date
Magnus Moliteus

/s/ Neal S. Penneys Director March 28, 2007
------------------------------ Date
Neal S. Penneys, MD, PhD

THE PLAN: Pursuant to the requirements of the Securities Act of 1933, the
trustees (or other persons who

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administer the employee benefit plan) have duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York on March 28, 2007.

DUSA Pharmaceuticals, Inc. Non-Qualified
Deferred Compensation Plan

By: /s/ Jay M. Haft
------------------------------------

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EXHIBIT INDEX

(4) Instruments defining the rights of security holders

(4.1) DUSA Pharmaceuticals, Inc. 2006 Equity Compensation Plan

(4.2) DUSA Pharmaceuticals, Inc. Non-Qualified Deferred Compensation Plan

(4.3) Class B. Warrant incorporated by reference from Exhibit 4(b) to
Registrant's Form 10-K for the year ended December 31, 2006 filed on
March 16, 2007.

(5) Opinion re: legality

(5.1) Opinion of Reed Smith LLP.

(23) Consents of experts and counsel

(23.1) Consent of Deloitte and Touche LLP

(23.2) Consent of Reed Smith LLP, included in Exhibit 5.1

(24) Power of attorney

(24.1) Power of Attorney (included on signature page)

(99) Additional Exhibits

(99.1) Form of Nonqualified Stock Option Grant Agreement

(99.2) Form of Incentive Stock Option Grant Agreement

(99.3) Form of Stock Award Grant Agreement

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