July 26, 2019

BY EDGAR

Andi Carpenter and Sharon Blume

Office of Healthcare and Insurance

Division of Corporation Finance

Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549

Form 10-K for Fiscal Year Ended December 31, 2018

Filed March 7, 2019

Form 10-Q for Quarterly Period Ended March 31, 2019

Filed May 10, 2019

File No. 001-34079

Dear Ms. Carpenter and Ms. Blume:

On behalf of Rexahn Pharmaceuticals, Inc. (the “Company”), this letter is in response to your letter dated July 12, 2019 (the “Comment Letter”) to Mr. Douglas J. Swirsky, President, Chief Executive Officer and Director of the Company, relating to the Company’s Annual Report on Form 10-K for the fiscal year December 31, 2018 and the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2019. For ease of reference, each of the Staff’s comments is set forth in italic type immediately before the corresponding response submitted on behalf of the Company, and the numbering below corresponds to the numbering in the Comment Letter.

The Company acknowledges the Staff’s comment and respectfully notes that its statements that its product candidates “appeared to be safe” or showed “preliminary signs of efficacy” are statements of preliminary insight only and are not intended to imply that its product candidates are safe or effective or that the FDA has made or will make any determination that the product candidates are safe or effective.  The Company believes that disclosure of this information is helpful to investors to assess the current status of the product candidates and to help understand the Company’s rationale for moving forward.  Nevertheless, in future filings, the Company will avoid statements that any of its product candidates “appeared to be safe” or show “preliminary signs of efficacy” unless that has been determined by the FDA.

Please address the following:

The Company did not provide any upfront consideration to Haichang upon entering into the research and development collaboration agreement with Haichang, nor was any upfront consideration provided to the Company by Haichang. Pursuant to the agreement, the Company granted Haichang an exclusive license under the Company’s intellectual property to conduct preclinical and clinical activities for nanoliposomal formulations of RX-0301 in China, Hong Kong, Macau and Taiwan in accordance with an agreed research and development plan, and Haichang granted the Company a worldwide, exclusive and perpetual license under Haichang intellectual property to research, develop, commercialize and manufacture nanoliposomal formulations of RX-0301.

Although the agreement is a research and development collaboration agreement, the Company is not required to be significantly involved in any joint development activities as the research and development work under the agreed research and development plan is performed solely by Haichang. The Company’s contribution to the research and development collaboration is a license of intellectual property, which is consistent with the Company’s ordinary business activities. As such, the Company accounts for this agreement as a contract with a customer that is within the scope of Accounting Standards Codification (“ASC”) No. 606, Revenue from Contracts with Customers (ASC 606). The Company has determined that its sole performance obligation to Haichang as determined under ASC 606 is the license to intellectual property. The license of intellectual property granted to Haichang was determined to be a right to use functional intellectual property, as the license has significant standalone functionality and is not dependent on continuing support of the license by the Company. The research and development collaboration agreement did not include cash consideration or, as noted above, any up-front consideration. The Company will solely be compensated by Haichang in this arrangement through non-cash consideration in the form of the rights to the enhanced value of the licensed intellectual property realized through the successful completion of research and development efforts by Haichang under this agreement. As the value of the non-cash consideration is dependent on the occurrence or non-occurrence of events that do not relate to the form of the non-cash consideration, the transaction price in this agreement is variable. At the agreement’s outset, the Company determined that the transaction price should be fully constrained given the early-stage nature of the intellectual property and uncertainty of the outcome of research and development activities to be completed by Haichang under the agreement. In addition, given the stage of the research and development efforts completed, the Company determined the value of the variable consideration through December 31, 2018 and March 31, 2019 was de minimis and therefore should continue to be fully constrained. Accordingly, no amounts related to this agreement were recorded in the Company’s financial statements in either period. The Company continues to re-evaluate its variable consideration constraint judgments on a periodic basis or when facts and circumstance indicate the factors impacting these judgments may change.

The Company has determined that the exclusive license of intellectual property and the supply of RX-3117 are distinct performance obligations. The Company notes the following factors in making this determination:

The Company will allocate the $3,000,000 transaction price based on the relative standalone selling price of each performance obligation. The Company has determined the standalone selling price of the license to intellectual property to be $3,000,000 using the adjusted market approach, which represents the price the market will bear based on the license rights granted and the state of the intellectual property. The Company has determined the standalone selling price of the clinical supply of RX-3117 to be $0.6 million based on a cost plus a margin approach. Accordingly, the Company has allocated $2.5 million of the transaction price to the license of intellectual property and $0.5 million of the transaction price to the supply of RX-3117. The Company will recognize revenue for each performance obligation at the point in time when control of the licensed property or supply of RX-3117, respectively transfers to the customer.

Under the collaboration agreement with BioSense, the Company is eligible to receive (i) up to an aggregate of $126 million based on the achievement of development and regulatory milestones in China and (ii) up to an aggregate of $100 million for the achievement of annual sales milestones in the Republic of Singapore, China, Hong Kong, Macau and Taiwan with respect to each pharmaceutical product containing RX-3117 as a single agent. The Company accounts for the milestones in the contract using the most likely amount approach. At the contract outset, the Company had determined that all of the milestone fees should be fully constrained as it is not probable that a significant reversal of revenue would not occur:

Furthermore, the Company notes that including one or more milestone payments could result in a significant reversal of revenue based on the magnitude of the reversal when compared to the upfront consideration provided (the reversal amount would significantly exceed the upfront consideration). The Company will re-evaluate its variable consideration constraint judgments on a periodic basis or when facts and circumstance indicate the factors impacting these judgments may change.

The Company respectfully acknowledges the Staff’s comment and advises the Staff that, without making a conclusion with respect to the Company’s dependence on the collaboration agreement with BioSense (the “BioSense Agreement”), the Company intends to file the BioSense Agreement as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019.  The Company disclosed this intention in its Current Report on Form 8-K filed April 16, 2019. The Company evaluates its agreements, including collaboration agreements, from time to time, and considers whether they constitute material agreements in the context of the Company’s business. The Company determined to treat the BioSense Agreement as a material agreement beginning in April 2019 upon payment of the second of three installments of a license fee under the BioSense Agreement. The license fee is payable as partial consideration for an exclusive license to make, use, import, market and sell pharmaceutical products containing RX-3117 for the prevention or treatment of metastatic pancreatic cancer in humans in Singapore, China, Hong Kong, Macau and Taiwan, and this license will not be granted until the license fee is paid in full. Upon payment of the second installment in April 2019, half of the license fee had been paid and the Company determined that it was then probable that BioSense intended to pay the full license fee. Prior to that time, Biosense had only paid a relatively de minimis portion of the license fee.

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If the Staff should have any questions, or would like further information, concerning any of the responses above, please do not hesitate to contact the undersigned at (410) 659-2778 or J. Nicholas Hoover at (410) 659-2790. We thank you in advance for your attention to the above.

Jacob L. Kutz, Baker Tilly Virchow Krause, LLP

J. Nicholas Hoover, Hogan Lovells US LLP

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