SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                  For the quarterly period ended June 30, 2001
                                       OR
              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                         Commission File Number 0-18311


                              NEUROGEN CORPORATION
             (Exact name of registrant as specified in its charter)


              Delaware                               22-2845714
   (State or other jurisdiction of                (I.R.S. Employer
   incorporation or organization)                 Identification No.)


                          35 Northeast Industrial Road
                           Branford, Connecticut 06405
               (Address of principal executive offices) (Zip Code)


                                 (203) 488-8201
              (Registrant's telephone number, including area code)



     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                                    Yes X        No
                                       ---         ---



     As of August 14, 2001 the registrant had 17,441,635  shares of Common Stock
outstanding.





                              NEUROGEN CORPORATION

                                      INDEX

                         Part I - Financial Information


Item 1. Consolidated Financial Statements

        Consolidated Balance Sheets at June 30, 2001 and
         December 31, 2000
        Consolidated Statements of Operations for the three-month and
         six-month periods ended June 30, 2001 and 2000
        Consolidated Statements of Cash Flows for the six-month periods
         ended June 30, 2001 and 2000
        Notes to Consolidated Financial Statements

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

Item 3. Quantitative and Qualitative Disclosures About Market Risk

                           Part II - Other Information

Item 1. Legal Proceedings

Item 2. Changes in Securities and Use of Proceeds

Item 3. Defaults upon Senior Securities

Item 4. Submission of Matters to a Vote of Security Holders

Item 5. Other Information

Item 6. Exhibits and Reports on Form 8-K

Signature

Exhibit Index





                         PART I - FINANCIAL INFORMATION

ITEM 1 - CONSOLIDATED FINANCIAL STATEMENTS


                                                    NEUROGEN CORPORATION
                                                 CONSOLIDATED BALANCE SHEETS
                                                       (In thousands)
                                                        (UNAUDITED)



                                                           JUNE 30, 2001                 DECEMBER 31, 2000
                                                           --------------                -----------------

                     Assets

Current assets:
   Cash and cash equivalents                                $      23,795                  $        48,086
   Marketable securities                                           69,188                           60,670
   Receivables from corporate partners                                 99                            1,517
   Other current assets                                               733                            1,364
                                                            -------------                  ---------------
       Total current assets                                        93,815                          111,637

Property, plant & equipment:
   Land, building and improvements                                 22,913                           17,949
   Construction in progress                                         7,666                            6,471
   Leasehold improvements                                             -                              4,026
   Equipment and furniture                                         15,443                           14,213
                                                           ---------------                 ----------------
                                                                   46,022                           42,659
   Less accumulated depreciation & amortization                    11,698                           12,079
                                                           ---------------                 ----------------
       Net property, plant and equipment                           34,324                           30,580

Other assets, net                                                     173                              371
                                                           ---------------                 ----------------
       Total assets                                        $      128,312                  $       142,588
                                                           ===============                 ================







See accompanying notes to consolidated financial statements.



                                                    NEUROGEN CORPORATION
                                                 CONSOLIDATED BALANCE SHEETS
                                            (In thousands, except per share data)
                                                        (UNAUDITED)


                                                               JUNE 30, 2001               DECEMBER 31, 2000
                                                             -----------------             -----------------
            Liabilities & Stockholders' Equity

Current liabilities:
   Accounts payable and accrued expenses                     $          4,117              $           5,014
   Unearned revenue from corporate partner                              7,797                          9,542
                                                             -----------------             ------------------
       Total current liabilities                                       11,914                         14,556

Loans payable                                                           1,912                          1,912
                                                             -----------------             ------------------
       Total liabilities                                               13,826                         16,468

Commitments and Contingencies

Stockholders' Equity:
   Preferred stock, par value $.025 per share
       Authorized 2,000 shares; none issued
   Common stock, par value $.025 per share
       Authorized 30,000 shares;  issued and outstanding
       17,441 shares at June 30, 2001 and 17,386 shares
       at December 31, 2000                                               436                            434
   Additional paid-in capital                                         170,140                        169,440
   Accumulated deficit                                                (55,938)                       (42,323)
   Deferred compensation                                                 (586)                        (1,706)
   Accumulated other comprehensive income                                 434                            275
                                                             -----------------             ------------------
       Total stockholders' equity                                     114,486                        126,120
                                                             -----------------             ------------------
       Total liabilities and stockholders' equity            $        128,312              $         142,588
                                                             =================             ==================




See accompanying notes to consolidated financial statements.



                                                            NEUROGEN CORPORATION
                                                    CONSOLIDATED STATEMENTS OF OPERATIONS
                                                   (In thousands, except per share data)
                                                                 (UNAUDITED)


                                                               THREE MONTHS       THREE MONTHS       SIX MONTHS      SIX MONTHS
                                                                   ENDED              ENDED            ENDED            ENDED
                                                               JUNE 30, 2001      JUNE 30, 2000*    JUNE 30, 2001   JUNE 30, 2000*
                                                             ----------------    ---------------   --------------   -------------
Operating revenues:
   License fees                                              $         2,495     $        2,222    $       3,745    $      2,222
   Research and development                                              720              2,398            1,440           4,989
                                                             ----------------    ---------------    -------------   -------------
       Total operating revenues                                        3,215              4,620            5,185           7,211

Operating expenses:
  Research and development:
   Stock compensation                                                     18                 52              902           4,625
   Other research and development                                      8,659              6,641           17,286          13,080
                                                             ----------------    ---------------    -------------   -------------
  Total research and development                                       8,677              6,693           18,188          17,705

  General and administrative:
   Stock compensation                                                     27                 23               72           2,046
   Other general and administrative                                    1,442             1,525            3,289           2,929
                                                             ----------------    ---------------    -------------   -------------
  Total general and administrative                                     1,469              1,548            3,361           4,975
                                                             ----------------    ---------------    -------------   -------------
       Total operating expenses                                       10,146              8,241           21,549          22,680
                                                             ----------------    ---------------    -------------   -------------
Operating loss                                                        (6,931)            (3,621)         (16,364)        (15,469)

Other income:
  Investment income                                                    1,242              1,079            2,751           2,008
                                                             ----------------    ---------------    -------------   -------------
   Total other income                                                  1,242              1,079            2,751           2,008
                                                             ----------------    ---------------    -------------   -------------

Net loss before cumulative effect of change
  in accounting principle                                             (5,689)            (2,542)         (13,613)        (13,461)

Cumulative effect on prior years of the
  application of SAB No. 101, Revenue Recognition
  in Financial Statements                                                -                  -                -              (500)
                                                             ----------------    ---------------    -------------   -------------
Net loss                                                     $        (5,689)    $       (2,542)    $    (13,613)   $    (13,961)
                                                             ================    ===============    =============   =============


Basic and diluted loss per share:
 Before cumulative effect of change in
  accounting principle                                       $         (0.33)    $        (0.16)    $      (0.78)   $      (0.87)
 Change in accounting principle                                          -                  -                -             (0.03)
                                                             ----------------    ---------------    -------------   -------------
Basic and diluted loss per share                             $         (0.33)    $        (0.16)    $      (0.78)   $      (0.90)
                                                             ================    ===============    =============   =============

Shares used in calculation of loss per share:
  Basic and diluted                                                   17,416             15,592           17,406          15,512
                                                             ================    ===============    =============   =============


* The 2000 second  quarter and year to date  financial  data, as reported in the
Company's Form 10-Q for the six months ended June 30, 2000, has been adjusted to
reflect the adoption of SAB No. 101 in the fourth  quarter of 2000,  retroactive
to January 1, 2000.

See accompanying notes to consolidated financial statements.



                                                             NEUROGEN CORPORATION
                                                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                (In thousands)
                                                                  (UNAUDITED)

                                                                         SIX MONTHS           SIX MONTHS
                                                                            ENDED                ENDED
                                                                        JUNE 30, 2001        JUNE 30, 2000
                                                                      -----------------     ---------------
Cash flows from operating activities:
   Net loss                                                           $        (13,613)     $      (13,961)
   Adjustments to reconcile net loss to net cash (used in)
     provided by operating activities:
       Depreciation and amortization expense                                     1,307               1,370
       Stock compensation expense                                                  974               6,671
       Other noncash compensation                                                  463                 821
   Changes in operating assets and liabilities:
      (Decrease) increase in accounts payable and accrued expenses                (897)                 62
      (Decrease) increase in unearned revenue from corporate partner            (1,745)             13,028
       Decrease (increase) in receivables from corporate partners                1,418              (1,282)
       Decrease in other assets, net                                               733                 153
                                                                      -----------------      ---------------
          Net cash (used in) provided by operating activities                  (11,360)              6,862

Cash flows from investing activities:
       Purchase of plant and equipment                                          (5,081)             (1,358)
       Purchases of marketable securities                                      (42,526)             (1,578)
       Maturities and sales of marketable securities                            34,087              21,260
       Proceeds from sales of assets                                                25                 -
                                                                      -----------------      ---------------
          Net cash (used in) provided by investing activities                  (13,495)             18,324

Cash flows from financing activities:
       Exercise of warrants & employee stock options                               564               8,670
       Proceeds from private placement of common stock                              -               37,200
                                                                      -----------------      ---------------
          Net cash provided by financing activities                                564              45,870
                                                                      -----------------      ---------------
Net (decrease) increase in cash and cash equivalents                           (24,291)             71,056

Cash and cash equivalents at beginning of period                                48,086              31,588
                                                                      -----------------      ---------------
Cash and cash equivalents at end of period                            $         23,795       $     102,644
                                                                      =================      ===============


See accompanying notes to consolidated financial statements.





                              Neurogen Corporation
                   Notes to Consolidated Financial Statements
                                  June 30, 2001
                                   (Unaudited)

 (1)      BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

               The unaudited  financial  statements  have been prepared from the
          books  and  records  of  Neurogen   Corporation   (the  "Company")  in
          accordance with generally accepted  accounting  principles for interim
          financial  information  pursuant  to Rule  10-01  of  Regulation  S-X.
          Accordingly,  they do not include all of the information and footnotes
          required by  generally  accepted  accounting  principles  for complete
          financial  statements.  In the opinion of management,  all adjustments
          (consisting of normal recurring accruals)  considered  necessary for a
          fair  presentation   have  been  included.   These  interim  financial
          statements  should be read in conjunction  with the audited  financial
          statements  for the year  ended  December  31,  2000  included  in the
          Company's  Annual  Report  on  Form  10-K.  Interim  results  are  not
          necessarily  indicative  of the results  that may be expected  for the
          full fiscal year.

 (2)      PRINCIPLES OF CONSOLIDATION

               The consolidated financial statements include the accounts of the
          parent  company  and a  subsidiary,  Neurogen  Properties  LLC,  after
          elimination of intercompany transactions.

 (3)      RECLASSIFICATIONS

               Certain  reclassifications  have been made to the 2000  financial
          statements in order to conform to the 2001 presentation.

 (4)      REVENUE RECOGNITION

               Revenue under research and development arrangements is recognized
          as  earned  under  the  terms of the  respective  agreements.  Product
          research  funding is recognized  as revenue,  generally on a quarterly
          basis,  as  research  effort  is  performed.  License  and  technology
          transfer revenue is recognized when a contractual  arrangement exists,
          fees are  fixed  and  determinable,  delivery  of the  technology  has
          occurred  and  collectibility  is  reasonably   assured.  If  customer
          acceptance is required,  revenue is deferred until acceptance  occurs.
          If there are on-going services or obligations after delivery,  revenue
          is recognized  over the related term of the service on a percentage of
          completion  basis,  unless such  obligation  is  maintenance  which is
          recognized  on a straight  line basis.  For  contracts  with  multiple
          elements,  total contract fees are allocated to the different elements
          based on  evidence  of fair value.  Deferred  revenue  arises from the
          payments  received  for research  and  development  to be conducted in
          future periods or for licenses of Neurogen rights or technology  where
          Neurogen has  continuing  involvement.  Deferred  revenue is generally
          expected to be recognized within the next twelve months.

               In  December  1999,  the  staff of the  Securities  and  Exchange
          Commission  issued its Staff  Accounting  Bulletin  ("SAB")  No.  101,
          Revenue Recognition in Financial  Statements.  SAB No. 101, as amended
          by SAB No. 101A and 101B,  provides  guidance on the  measurement  and
          timing  of  revenue  recognition  in  financial  statements  of public
          companies.  SAB No. 101  permits  application  of its  guidance  to be
          treated as a change in  accounting  principle in  accordance  with APB
          Opinion No. 20, Accounting Changes.

               The  Company  adopted  the  guidance of SAB No. 101 in the fourth
          quarter  of 2000,  retroactive  to  January  1, 2000 and  reflected  a
          cumulative effect of the change in accounting principle on prior years
          of  $500,000,  related  to timing of  revenue  recognition  on certain
          non-refundable up-front payments previously recognized on a technology
          transfer  agreement.  The Company  also  adjusted  its 2000  quarterly
          financial data to reflect the adoption of SAB No. 101,  resulting in a
          decrease in revenue previously  reported for the six months ended June
          30, 2000 of $145,000  and an increase in revenue  previously  reported
          for the three months ended June 30, 2000 of $105,000.


 (5)      NON-CASH COMPENSATION CHARGE

               On January 15,  2001,  certain  modifications  were made to stock
          options  previously  granted  to a retiring  executive  officer of the
          Company.  A  non-recurring,  non-cash charge to income of $803,000 was
          recorded in the first  quarter of 2001 for  extending  the life of the
          officer's unvested options.


 (6)      BUILDING PURCHASE

               In 1995,  the Company  entered  into a ten year  operating  lease
          agreement to lease 24,000 square feet of space in a building  adjacent
          to the Company's existing research facility. The Company had an option
          to purchase the building  beginning in the sixth year of the lease. On
          January 11, 2001,  the Company  exercised its option,  purchasing  the
          building for $2,437,500 and thereby terminating the lease. Unamortized
          leasehold improvement costs were also capitalized into the building at
          time of purchase.


(7)      SUBSEQUENT EVENT

               In  July  of  2001,   Connecticut   Innovations,   Inc.  advanced
          approximately  $3.1 million to the Company  representing the remainder
          of a $5.0 million loan commitment  made in October of 1999.  Beginning
          in August of 2001,  the loan balance of $5.0 million will be repayable
          in monthly  installments over 15 years,  bearing interest at an annual
          rate of 7.5%.




Item 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

               Since its inception in September 1987,  Neurogen has been engaged
          in the discovery and development of drugs. The Company has not derived
          any revenue from product sales and expects to incur significant losses
          in most years prior to deriving any such product revenues. Revenues to
          date have come from three  collaborative  research  agreements and one
          technology  transfer  agreement  entered  into with Pfizer  Inc.,  one
          collaborative agreement with Schering-Plough and one license agreement
          with American Home Products.

          RESULTS OF OPERATIONS

               Results of operations may vary from period to period depending on
          numerous factors, including the timing of income earned under existing
          or future strategic alliances,  technology transfer agreements,  joint
          ventures or financings, if any, the progress of the Company's research
          and  development  and  technology  transfer  projects,   technological
          advances and determinations as to the commercial potential of proposed
          products.  Neurogen expects research and development costs to increase
          significantly  over the  next  several  years as its drug  development
          programs progress.  In addition,  general and administrative  expenses
          necessary to support the expanded research and development  activities
          are generally expected to increase for the foreseeable future.

          THREE MONTHS ENDED JUNE 30, 2001 AND 2000

               The Company's  operating  revenues  decreased to $3.2 million for
          the three  months  ended June 30, 2001 as compared to $4.6 million for
          the same period in 2000.  The  decrease in reasearch  and  development
          revenues is due  primarily to a scheduled  reduction in the  Company's
          staffing  on  collaborative  programs  with  Pfizer  (the GABA and NPY
          programs  descibed  below)  and the  related  reduction  in  discovery
          research funding.  License fees of $2.5 million were recognized in the
          second  quarter of 2001  pursuant  to the Pfizer  Technology  Transfer
          Agreement  (described  below)as compared to $2.2 million in the second
          quarter of 2000.  Operating  revenues in future  periods may fluctuate
          significantly   due  to  many  factors,   including   those  described
          throughout this section.

               Research and  development  expenses  increased 30 percent to $8.7
          million for the three-month  period ended June 30, 2001 as compared to
          $6.7  million for the same period in 2000.  The  increase is primarily
          due to  increases  in  research  and  development  personnel,  further
          development of potential  drug candidates and the Company's  continued
          expansion of its AIDD  (Accelerated  Intelligent  Drug Design) Program
          for the  discovery of new drug  candidates.  Research and  development
          expenses  represented  86 percent and 81 percent of total  expenses in
          the three month periods ended June 30, 2001 and 2000, respectively.

               General and  administrative  expenses  overall remained stable at
          $1.5 million for the three-month periods ended June 30, 2001 and 2000.

               Other income,  consisting  primarily of interest income and gains
          and losses from invested cash and marketable securities,  increased 15
          percent for the second  quarter of 2001 as compared to the same period
          in 2000 due primarily to a higher level of invested funds.

               The Company  recognized  a net loss of $5.7 million for the three
          months ended June 30, 2001 as compared with a net loss of $2.5 million
          for the same period in 2000. The increase in net loss is primarily due
          to  the  decrease  in  revenues  and  the  increase  in  research  and
          development expenses described above.


          SIX MONTHS ENDED JUNE 30, 2001 AND 2000

               The Company's  operating  revenues  decreased to $5.2 million for
          the six months  ended  June 30,  2001 from $7.2  million  for the same
          period in 2000. The decrease in research and  development  revenues is
          due primarily to a scheduled  reduction in the  Company's  staffing on
          collaborative programs with Pfizer (the GABA and NPY programs descibed
          below)  and the  related  reduction  in  discovery  research  funding.
          License fees of $3.7 million were  recognized  in the six month period
          ended  June  30,  2001  pursuant  to the  Pfizer  Technology  Transfer
          Agreement  (described  below) as compared  to $2.2  million in the six
          month period ended June 30, 2000. Operating revenues in future periods
          may  fluctuate  significantly  due to many  factors,  including  those
          described throughout this section.

               Research  and  development  expenses,  excluding  non-cash  stock
          compensation  charges,  increased 32 percent to $17.3  million for the
          six-month  period ended June 30, 2001 as compared to $13.1 million for
          the same period in 2000. The increase is primarily due to increases in
          research and development  personnel,  further development of potential
          drug candidates,  as well as the Company's  continued expansion of its
          AIDD  (Accelerated  Intelligent Drug Design) Program for the discovery
          of new drug candidates.  Research and development expenses represented
          84  percent  and 82  percent of total  operating  expenses  (excluding
          non-cash compensation  charges)in the six month periods ended June 30,
          2001 and 2000, respectively.

               General and  administrative  expenses,  excluding  non-cash stock
          compensation  charges,  increased  12 percent to $3.3  million for the
          six-month  period  ended June 30, 2001 as compared to $2.9 million for
          the same period in 2000.  This  increase is  attributed  to additional
          administrative  and  technical  services and  personnel to support the
          protection of Neurogen's growing intellectual  property estate and the
          pursuit  of  potential  collaborative  relationships  to  support  and
          commercialize Neurogen's expanding research pipeline.

               Other income,  consisting  primarily of interest income and gains
          and losses from invested cash and marketable securities,  increased 37
          percent for the six months ended June 30, 2001 as compared to the same
          period in 2000, due primarily to a higher level of invested funds.

               The Company  recognized  a net loss of $13.6  million for the six
          months  ended  June  30,  2001 as  compared  with a net  loss of $14.0
          million  for the same  period  in 2000.  The  decrease  in net loss is
          primarily due to a one-time non-cash $6.5 million charge recognized in
          the  first  quarter  of 2000 upon the  vesting  of  137,625  shares of
          restricted  stock  granted to certain  employees in 1998,  offset by a
          decrease  in  research  and  development  revenues  and an increase in
          research and development and general and  administrative  expenses for
          the six months ended June 30, 2001 as described above.

               In  December  1999,  the  staff of the  Securities  and  Exchange
          Commission  issued its Staff  Accounting  Bulletin  ("SAB")  No.  101,
          Revenue Recognition in Financial  Statements.  SAB No. 101, as amended
          by SAB No. 101A and 101B,  provides  guidance on the  measurement  and
          timing  of  revenue  recognition  in  financial  statements  of public
          companies.  SAB No. 101  permits  application  of its  guidance  to be
          treated as a change in  accounting  principle in  accordance  with APB
          Opinion No. 20, Accounting Changes.

               The  Company  adopted  the  guidance of SAB No. 101 in the fourth
          quarter of 2000,  retroactive  to January 1,  2000,  and  reflected  a
          cumulative effect of change in accounting  principle on prior years of
          $500,000,   related  to  timing  of  revenue  recognition  on  certain
          non-refundable up-front payments previously recognized on a technology
          transfer  agreement.  Consistent  with SAB No. 101,  the Company  also
          revised  the  recognition  of  revenue in 2000 on a  quarterly  basis,
          resulting in a reduction in previously  reported first quarter revenue
          of  $250,000.  This revenue was  recognized  under the  Company's  new
          revenue recognition policy in subsequent  quarters in 2000,  beginning
          with an increase in  previously  reported  second  quarter  revenue of
          $105,000.

          LIQUIDITY AND CAPITAL RESOURCES

               At June 30, 2001 and December 31, 2000,  cash,  cash  equivalents
          and  marketable  securities  were in the  aggregate  $93.0 million and
          $108.8 million,  respectively.  A total amount of $36.2 million of the
          marketable  securities at June 30, 2001 have  maturities  greater than
          one year,  however the Company can and may liquidate such  investments
          prior to maturity to meet its  strategies  or  investment  objectives.
          While the Company's  aggregate  level of cash,  cash  equivalents  and
          marketable  securities  decreased during the first half of 2001, these
          levels have fluctuated  significantly  in the past and are expected to
          do so in the future as a result of the factors described below.

               Neurogen's  cash  requirements  to  date  have  been  met  by the
          proceeds of its financing  activities,  amounts  received  pursuant to
          collaborative or technology transfer  arrangements and interest earned
          on invested funds. The Company's financing  activities include private
          placement offerings of the Company's common stock prior to its initial
          public offering, underwritten public offerings of the Company's common
          stock in 1989,  1991 and 1995, a private  placement of common stock in
          2000 and the private sale of common stock to Pfizer in connection with
          entering into the Pfizer Agreements and to American Home Products in a
          licensing  agreement.  Total  funding  received  from these  financing
          activities   was   approximately   $146.6   million.   The   Company's
          expenditures  have been primarily to fund research and development and
          general and  administrative  expenses and to  construct  and equip its
          research and development facilities.

          Pfizer
          ------

               In the first quarter of 1992,  the Company  entered into the 1992
          Pfizer Agreement  pursuant to which Pfizer made a $13.8 million equity
          investment in the Company and agreed,  among other  things,  to fund a
          specified  level of resources for up to five years (later  extended as
          described below) for Neurogen's research programs for the discovery of
          GABA-based drugs for the treatment of anxiety and cognitive disorders.
          As of June 30,  2001,  Pfizer had provided  $42.1  million of research
          funding to the  Company  pursuant  to the 1992  Pfizer  Agreement,  as
          extended,  and $0.5 million for the  achievement  of certain  clinical
          development and regulatory milestones. Neurogen is eligible to receive
          additional  milestone  payments  of up to  $12.0  million  if  certain
          development  and  regulatory  objectives  are achieved  regarding  its
          products subject to the collaboration.  In return, Pfizer received the
          exclusive rights to manufacture and market  collaboration  anxiolytics
          and cognition enhancers that act through the family of receptors which
          interact  with the  neuro-transmitter  GABA.  Pfizer will pay Neurogen
          royalties based upon net sales levels, if any, for such products.

               Neurogen  and  Pfizer  entered  into their  second  collaborative
          agreement,  the 1994 Pfizer Agreement, in July 1994, pursuant to which
          Pfizer  made an  additional  $9.9  million  equity  investment  in the
          Company and agreed,  among other things,  to fund a specified level of
          resources for up to four years (later extended as described below) for
          Neurogen's  research  program for the development of GABA-based  drugs
          for the treatment of sleep disorders.  As of June 30, 2001, Pfizer had
          provided $13.7 million of research  funding to the Company pursuant to
          the 1994  Pfizer  Agreement,  as  extended,  and $0.3  million for the
          achievement of a clinical development  milestone.  Neurogen could also
          receive additional milestone payments of up to $3.0 million if certain
          development  and  regulatory  objectives  are achieved  regarding  its
          products subject to the collaboration.  In return, Pfizer received the
          exclusive  rights to manufacture and market  GABA-based sleep disorder
          products for which it will pay Neurogen royalties based upon net sales
          levels, if any.

               In  December  1996,  December  1998 and again in  December  2000,
          Neurogen and Pfizer extended and combined  Neurogen's research efforts
          under  the  1992  and  1994  Agreements.  Pursuant  to  the  extension
          agreements, Neurogen has received $1.4 million in the first six months
          of 2001 (which  amount is included in the  above-described  cumulative
          totals  received  for the 1992  and 1994  agreements)  and  under  the
          extension  expects to receive an  additional  $1.4 million  during the
          remainder  of  2001  for  research  and  development  funding  of  the
          Company's   GABA-based   anxiolytic,   cognitive  enhancer  and  sleep
          disorders projects.

               Under  both  the  1992  Pfizer  Agreement  and  the  1994  Pfizer
          Agreement,  in  addition  to making  the  equity  investments  and the
          research and milestone payments noted above, Pfizer is responsible for
          funding the cost of all clinical development and the manufacturing and
          marketing,  if  any,  of  drugs  developed  from  the  collaborations.

               Neurogen  and  Pfizer  entered  into  their  third  collaborative
          agreement,  the 1995 Pfizer Agreement,  in November 1995,  pursuant to
          which Pfizer made an additional $16.5 million equity investment in the
          Company.  Pfizer also paid a $3.5 million  license fee.  Additionally,
          Pfizer  agreed,  among  other  things,  to fund a  specified  level of
          resources for up to five years for Neurogen's research program for the
          discovery  of  drugs  which  work  through  the  neuropeptide  Y (NPY)
          mechanism for the treatment of obesity and other disorders. In October
          2000,  Neurogen  and  Pfizer  concluded  the  research  phase of their
          NPY-based collaboration according to schedule.  Therefore,  the annual
          research funding  formerly  received from Pfizer came to its scheduled
          conclusion  on October 31, 2000.  Should Pfizer in the future elect to
          continue  the   development   of  any  drug   candidates   subject  to
          collaboration,  Neurogen could also receive development and regulatory
          milestone   payments   and   would  be   entitled   to  the   royalty,
          profit-sharing and manufacturing rights described above.

               In June 1999,  Neurogen  and  Pfizer  entered  into a  technology
          transfer agreement (the "Pfizer Technology Transfer Agreement"). Under
          the terms of this agreement, Pfizer has agreed to pay Neurogen a total
          of up to $27.0  million over a three year period for the licensing and
          transfer to Pfizer of certain of Neurogen's AIDD  technologies for the
          discovery of new drugs, along with the installation of an AIDD system.
          Additional   payments  are  also  possible  upon  Pfizer's  successful
          utilization of this  technology.  Pfizer has received a  non-exclusive
          license to certain AIDD intellectual  property and the right to employ
          this technology in its own drug development  programs.  As of June 30,
          2001,  Pfizer had provided  $22.8  million in license fees pursuant to
          the Pfizer AIDD agreement,  of which $15.0 million has been recognized
          as  revenue  to  date.  Remaining  revenues  associated  with  amounts
          received  under  the  Pfizer  Technology  Transfer  Agreement  will be
          recognized in future periods and may fluctuate significantly depending
          on the timing and  completion of the Company's  transfer of technology
          and systems pursuant to the agreement.

               The  Company  plans  to  use  its  cash,  cash   equivalents  and
          marketable  securities  for its research and  development  activities,
          working capital and general corporate purposes.  Neurogen  anticipates
          that its current cash balance,  as  supplemented  by research  funding
          pursuant to the Pfizer Agreements and fees it expects to receive under
          the Pfizer Technology Transfer  Agreement,  will be sufficient to fund
          its  current and planned  operations  through at least 2003.  However,
          Neurogen's  funding  requirements  may  change  and will  depend  upon
          numerous  factors,  including  but not limited to, the progress of the
          Company's research and development programs, the timing and results of
          preclinical  testing and clinical  studies,  the timing of  regulatory
          approvals, technological advances, determinations as to the commercial
          potential of its proposed products, the status of competitive products
          and the ability of the Company to establish and maintain collaborative
          arrangements  with others for the purpose of funding certain  research
          and  development  programs,  conducting  clinical  studies,  obtaining
          regulatory   approvals   and,   if  such   approvals   are   obtained,
          manufacturing and marketing products.  The Company anticipates that it
          may augment its cash balance through financing transactions, including
          the  issuance  of debt or  equity  securities  and  further  corporate
          alliances.  No  assurances  can  be  given  that  adequate  levels  of
          additional funding can be obtained on favorable terms, if at all.

               As of December  31,  2000,  the Company had  approximately  $62.6
          million  and $3.7  million  of net  operating  loss and  research  and
          development credit carryfowards,  respectively,  available for federal
          income tax purposes  which expire in the years 2004 through 2020.  The
          Company  also had  approximately  $51.1  million  and $2.2  million of
          Connecticut  state tax net operating loss and research and development
          credit  carryfowards,  respectively,  which  expire in the years  2001
          through 2020.  Because of "change in ownership"  provisions of the Tax
          Reform Act of 1986,  the  Company's  utilization  of its net operating
          loss and research and development credit  carryforwards may be subject
          to an annual limitation in future periods.

ITEM 3.  QUANTITATIVE  AND QUALITATIVE  DISCLOSURES  ABOUT MARKET RISK

               Interest rate risk. The Company's  investment  portfolio includes
          investment  grade debt  instruments.  These  securities are subject to
          interest  rate  risk,  and could  decline in value if  interest  rates
          fluctuate.  Due to the short duration and conservative nature of these
          instruments,  the  Company  does not  believe  that it has a  material
          exposure to interest rate risk.  Additionally,  funds  available  from
          investment  activities are dependent upon available  investment rates.
          These  funds may be higher or lower than  anticipated  due to interest
          rate volatility.

               Capital  market  risk.  The  Company  currently  has  no  product
          revenues and is dependent on funds raised through other  sources.  One
          source of funding is through further equity offerings.  The ability of
          the Company to raise funds in this manner is  dependent  upon  capital
          market forces affecting the stock price of the Company.



                           Part II - Other Information

Item 1. Legal Proceedings

               Not applicable for the second quarter ended June 30, 2001.

Item 2. Changes in Securities and Use of Proceeds

               Not applicable for the second quarter ended June 30, 2001.

Item 3. Defaults upon Senior Securities

               Not applicable for the second quarter ended June 30, 2001.

Item 4. Submission of Matters to a Vote of Security Holders

               Not applicable for the second quarter ended June 30, 2001.

Item 5. Other Information

               Not applicable for the second quarter ended June 30, 2001.

Item 6. Exhibits and Reports on Form 8-K

               (a) See Exhibit Index.

               (b) None.


SAFE HARBOR STATEMENT

     Statements which are not historical facts,  including  statements about the
Company's  confidence and strategies,  the status of various product development
programs,  the sufficiency of cash to fund planned  operations and the Company's
expectations  concerning its development compounds,  drug discovery technologies
and  opportunities  in  the  pharmaceutical  marketplace  are  "forward  looking
statements" within the meaning of the Private Securities  Litigations Reform Act
of 1995 that involve risks and  uncertainties  and are not  guarantees of future
performance. These risks include, but are not limited to, difficulties or delays
in development, testing, regulatory approval, production and marketing of any of
the  Company's  drug  candidates,  the  failure to attract or retain  scientific
management  personnel,   any  unexpected  adverse  side  effects  or  inadequate
therapeutic  efficacy  of the  Company's  drug  candidates  which  could slow or
prevent  product   development   efforts,   competition   within  the  Company's
anticipated product markets, the Company's dependence on corporate partners with
respect  to  research   and   development   funding,   regulatory   filings  and
manufacturing and marketing expertise, the uncertainty of product development in
the pharmaceutical industry, inability to obtain sufficient funds through future
collaborative  arrangements,  equity  or debt  financings  or other  sources  to
continue  the  operation  of the  Company's  business,  risk  that  patents  and
confidentiality   agreements   will  not   adequately   protect  the   Company's
intellectual  property or trade secrets,  dependence  upon third parties for the
manufacture of potential  products,  inexperience in  manufacturing  and lack of
internal  manufacturing  capabilities,  dependence  on third  parties  to market
potential  products,  lack  of  sales  and  marketing  capabilities,   potential
unavailability   or  inadequacy  of  medical   insurance  or  other  third-party
reimbursement  for the cost of purchases of the  Company's  products,  and other
risks  detailed in the Company's  Securities  and Exchange  Commission  filings,
including its Annual  Report on Form 10-K and 10-K/A for the year ended  December
31, 2000,  each of which could adversely  affect the Company's  business and the
accuracy of the forward-looking statements contained herein.



                                    SIGNATURE



     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                                            NEUROGEN CORPORATION



                                               By:/s/   STEPHEN R. DAVIS
                                                  ------------------------
                                                    Stephen R. Davis
                                                    Senior Vice President
                                                    and Chief Business Officer

Date:  August 14, 2001



                                  EXHIBIT INDEX
Exhibit
- -------
Number
- ------

10.1    - Neurogen  Corporation Stock  Option Plan, as amended  (incorporated by
          reference  to Exhibit 10.1 to the  Company's  Form 10-K for the fiscal
          year ended December 31, 1991).

10.2    - Form of Stock Option  Agreement  currently used in connection with the
          grant  of  options  under  Neurogen   Corporation  Stock  Option  Plan
          (incorporated  by reference to Exhibit 10.2 to the Company's Form 10-K
          for the fiscal year ended December 31, 1992).

10.3    - Neurogen   Corporation   1993  Omnibus   Incentive  Plan,  as  amended
          (incorporated  by reference to Exhibit 10.3 to the Company's Form 10-K
          for the fiscal year ended December 31, 1993).

10.4    - Form of Stock Option  Agreement  currently used in connection with the
          grant of options under  Neurogen  Corporation  1993 Omnibus  Incentive
          Plan (incorporated  by reference to Exhibit 10.4 to the Company's Form
          10-K for the fiscal year ended December 31, 1993).

10.5    - Neurogen   Corporation   1993  Non-Employee   Directors  Stock  Option
          Program  (incorporated  by reference to Exhibit 10.5 to the  Company's
          Form 10-K for the fiscal year ended December 31, 1993).

10.6    - Form of Stock Option  Agreement  currently used in connection with the
          grant  of  options  under  Neurogen   Corporation  1993   Non-Employee
          Directors Stock Option Program  (incorporated  by reference to Exhibit
          10.6 to the Company's Form 10-K for the fiscal year ended December 31,
          1993).

10.7    - Employment  Contract  between the Company  and Harry H.  Penner,  Jr.,
          dated as of October 12, 1993  (incorporated  by  reference  to Exhibit
          10.7 to the Company's Form 10-K for the fiscal year ended December 31,
          1993).

10.8    - Employment Contract between the Company and John F. Tallman,  dated as
          of December 1, 1993 (incorporated by reference to Exhibit 10.25 to the
          Company's Form 10-Q for the quarterly period ended September 30,1994).

10.9    - Form   of   Proprietary   Information    and    Inventions   Agreement
          (incorporated by reference to Exhibit 10.31 to Registration  Statement
          No. 33-29709 on Form S-1).

10.10   - Collaborative  Research  Agreement  and License and Royalty  Agreement
          between  the  Company  and  Pfizer  Inc,  dated as of  January 1, 1992
          (CONFIDENTIAL  TREATMENT  REQUESTED)  (incorporated  by  reference  to
          Exhibit  10.35 to the  Company's  Form 10-K for the fiscal  year ended
          December 31, 1991).

10.11   - Letter Agreement between the Company and Barry M. Bloom, dated January
          12, 1994  (incorporated by reference to Exhibit 10.25 to the Company's
          Form 10-K for the fiscal year ended December 31, 1993).

10.12   - Letter  Agreement  between the Company and Robert H. Roth, dated April
          14, 1994  (incorporated by reference to Exhibit 10.26 to the Company's
          Form 10-K for the fiscal year ended December 31, 1994).

10.13   - Collaborative  Research  Agreement  and License and Royalty  Agreement
          between  the  Company  and  Pfizer  Inc,  dated  as of  July  1,  1994
          (CONFIDENTIAL  TREATMENT  REQUESTED)  (incorporated  by  reference  of
          Exhibit 10.1 to the Company's Form 10-Q for the quarterly period ended
          June 30, 1994).

10.14   - Stock  Purchase  Agreement  between the Company and Pfizer dated as of
          July  1,  1994  (incorporated  by  reference  to  Exhibit  10.2 to the
          Company's Form 10-Q for the quarterly period ended June 30, 1994).

10.15   - Collaboration  and License  Agreement and Screening  Agreement between
          the Company and Schering-Plough  Corporation  (CONFIDENTIAL  TREATMENT
          REQUESTED) (incorporated by reference to Exhibit 10.1 to the Company's
          Form 8-K dated July 28, 1995).

10.16   - Lease Agreement between the Company and Commercial Building Associates
          dated as of August 30,  1995  (incorporated  by  reference  to Exhibit
          10.27  to  the  Company's Form  10-Q  for  the  quarterly period ended
          September 30, 1995).

10.17   - Collaborative  Research Agreement between the Company and Pfizer dated
          as  of    November   1,   1995    (CONFIDENTIAL  TREATMENT  REQUESTED)
          (incorporated by reference to Exhibit 10.1 of the  Company's Form 8-K
          dated November 1, 1995).

10.18   - Development and  Commercialization  Agreement  between the Company and
          Pfizer dated as of November 1, 1995 (CONFIDENTIAL TREATMENT REQUESTED)
          (incorporated  by  reference to Exhibit 10.2 of the Company's Form 8-K
          dated November 1, 1995).

10.19   - Stock  Purchase  Agreement  between the Company and Pfizer dated as of
          November  1, 1995  (incorporated  by   reference  to  Exhibit  10.3 of
          the Company's Form 8-K dated November 1, 1995).

10.20   - Stock  Purchase  Agreement  dated  as of  November  25,  1996  between
          American Home Products  Corporation,  acting through its  Wyeth-Ayerst
          Laboratories   Division,   and  Neurogen   Corporation   (CONFIDENTIAL
          TREATMENT REQUESTED) (incorporated by reference to Exhibit 10.1 of the
          Company's Form 8-K dated March 31, 1997).

10.21   - Technology  agreement  between  the  Company and  Pfizer Inc, dated as
          of June 15, 1999 (CONFIDENTIAL TREATMENT  REQUESTED) (incorporated  by
          reference  to  Exhibit  10.27  to  the  Company's  Form  10-Q for  the
          quarterly period ended June 30, 1999).

10.22   - Employment  Contract  between the Company and Alan J. Hutchison, dated
          as of December 1, 1997  (incorporated  by  reference  to Exhibit 10.28
          to the  Company's Form 10-K  for the  fiscal year  ended  December 31,
          1999).

10.23   - Employment  Contract  between the Company  and Stephen R. Davis, dated
          as of December 1, 1997 (incorporated  by  reference  to Exhibit  10.29
          to the Company's Form  10-K for the  fiscal  year  ended  December 31,
          1999).

10.24   - Employment  Contract  between  the Company  and Kenneth R. Shaw, dated
          as of December 1, 1999  (incorporated  by  reference  to Exhibit 10.30
          to the  Company's Form  10-K for the  fiscal  year ended  December 31,
          1999).

10.25   - Neurogen Corporation 2000 Non-Employee  Directors Stock Option Program
          (incorporated  by  reference to Exhibit 10.31  to  the Company's  Form
          10-Q for the quarterly period ended June 30, 2000).

10.26   - Form  of the Non-Qualified Stock  Option  Agreement  currently used in
          connection  with  the  grant of options under the Neurogen Corporation
          2000  Non-Employee  Directors  Stock  Option  Program (incorporated by
          reference  to  Exhibit  10.32  to  the  Company's  Form 10-Q  for  the
          quarterly period ended June 30,2000).

10.27   - Registration Rights  Agreement  dated  as of June 26, 2000 between the
          Company and the Purchasers listed on Exhibit  A thereto  (incorporated
          by  reference  to  Exhibit  10.33 to  the Company's  Form 10-Q for the
          quarterly  period ended June 30, 2000).

10.28   - Severance Agreement between the Company and John F. Tallman,  dated as
          of January 15, 2001 (incorporated by reference to Exhibit 10.28 to the
          Company's Form 10-Q for the quarterly period ended March 31, 2001).