EX-99.1 2 f8k110805exhibit991.htm EXHIBIT 99.1 OF 8K FILED 11-08-05 Exhibit 99.1 of 8K filed 11-08-05
Exhibit 99.1
 
 For Immediate Release
 Contact:
 
 Elaine Grimsell Dodge
 
 Neurogen Corp.
 
 203-315-4615
 
 edodge@nrgn.com
 
NEUROGEN CORPORATION ANNOUNCES
THIRD QUARTER 2005 FINANCIAL RESULTS
 
Branford, CT, November 8, 2005 —Neurogen Corporation (Nasdaq: NRGN), a drug discovery and development company, today announced financial results for the three and nine month periods ended September 30, 2005.

Neurogen recognized a net loss for the third quarter of 2005 of $9.5 million, or $0.28 per share on 34.3 million weighted average shares outstanding. This compares to a net loss during the third quarter of 2004 of $4.5 million, or $0.13 per share on 34.0 million weighted average shares outstanding. The Company recognized a net loss for the nine months ended September 30, 2005 of $26.5 million, or $0.77 per share on 34.3 million weighted average shares outstanding, as compared to a net loss of $15.7 million, or $0.56 per share on 28.2 million weighted average shares outstanding, for the comparable period of 2004. The increase in net loss for the quarter and nine month period was due primarily to lower operating revenue and increased research and development expenses as discussed below.

Neurogen’s total cash and marketable securities as of September 30, 2005 totaled $124.2 million and as of December 31, 2004 totaled $151.8 million.

William H. Koster, Ph.D, President and CEO said, "As we head into the final quarter of this year, I believe we’re well positioned for considerable expansion of our portfolio over the remainder of 2005 and during 2006. During the third quarter, we announced Phase I, first-in-human results for our lead insomnia compound, NG2-73, and we are moving forward with compounds in preclinical development in our pain, depression, and obesity programs. Our strong balance sheet enables us to invest in these assets and the impact on our burn rate is consistent with our expectations."
 
Dr. Koster added, "We were very pleased with the solid results of our single rising dose study with NG2-73. The pharmacokinetics of NG2-73, coupled with the physical/chemical characteristics of the compound, provide the potential to achieve fast onset of sleep. In addition, we are currently developing formulations designed to provide optimal sleep maintenance. In follow-up Phase I studies, we're testing multiple ascending doses of NG2-73 in healthy subjects, as well as conducting a pharmacokinetic/pharmacodynamic (PK/PD) study to evaluate the sleep-inducing effects of the drug at various dosages. These data will help to establish a range of doses for planned Phase II studies."
 
Operating revenue for the third quarter of 2005 decreased 54% to $2.0 million from $4.2 million for the third quarter of 2004 and for the nine months ended September 30, 2005 was $5.9 million compared to $13.5 million for the comparable period of 2004. The decrease in operating revenue for the quarter and the nine month period is due primarily to lower license fees and research funding as a result of the termination in December 2004 of the Company’s collaboration with sanofi-aventis to develop CRF-based drugs to treat stress-related disorders, following the merger of Sanofi-Synthelabo and Aventis Pharma.

Research and development expenses, excluding non-cash stock compensation charges, for the third quarter of 2005 increased 45% to $10.6 million from $7.3 million in the third quarter of 2004 and for the nine month period increased 14% to $28.3 million from $24.9 million in the comparable period of 2004. The increase in R&D expenses for the quarter is due mainly to continued progress in Neurogen’s proprietary clinical program in insomnia and in its preclinical programs for depression and obesity.

General and administrative expenses, excluding non-cash stock compensation charges, for the third quarter of 2005 were $1.9 million, compared to $2.0 million for the same period in 2004 and for the nine month period increased to $5.9 million from $5.5 million for the comparable period of 2004.

Webcast
The Company will host a conference call and webcast to discuss third quarter results at 10:00 a.m. EDT today, November 8, 2005. The webcast will be available in the Investor Relations section of www.neurogen.com and will be archived on the website until June 30, 2006. A replay of the call will be available after 1:00 pm EDT on November 8, 2005 and accessible through the close of business, November 22, 2005. To replay the conference call, dial 888-286-8010, or for international callers, 617-801-6888, and use the pass code: 42071980.

About Neurogen Corporation
Neurogen Corporation is a drug discovery and development company focusing on small molecule drugs to improve the lives of patients suffering from disorders with significant unmet medical need, including insomnia, pain, depression, inflammation, and obesity. Neurogen has generated a portfolio of compelling new drug candidates through its Accelerated Intelligent Drug Discovery (AIDD™) system, its expertise in cellular functional assays, and its depth in medicinal chemistry. Neurogen conducts its research and development independently and, when advantageous, collaborates with world-class pharmaceutical companies.

 
The information in this press release contains certain forward-looking statements that involve risks and uncertainties as detailed from time to time in Neurogen's SEC filings, including its most recent Form 10-K. Actual results may differ materially from the statements made as a result of various factors, including, but not limited to, risks associated with the inherent uncertainty of drug research and development, difficulties or delays in development, testing, regulatory approval, production and marketing of any of the Company's drug candidates, adverse side effects or inadequate therapeutic efficacy of the Company's drug candidates, advancement of competitive products, dependence on corporate partners, sufficiency of cash to fund the Company's planned operations and patent, product liability and third party reimbursement risks associated with the pharmaceutical industry.
 
 

 
NEUROGEN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
(unaudited)
 
   
Three Months
Ended
September 30, 2005
 
Three Months
Ended
September 30, 2004
 
Nine Months
Ended
September 30, 2005
 
Nine Months
Ended
September 30, 2004
  
Operating revenues:
                          
    License fees
 
$
906
  
$
2,463
  
$
2,719
  
$
4,963
  
    Research revenues
   
1,050
    
1,749
    
3,150
    
8,490
  
       Total operating revenues
   
1,956
    
4,212
    
5,869
    
13,453
  
                           
Operating expenses:
                          
    Research and development
                         
       Stock compensation*
   
70
    
80
    
441
    
180
  
       Other R&D
   
10,600
    
7,293
    
28,292
    
24,854
  
       Total R&D
   
10,670
    
7,373
    
28,733
    
25,034
  
 
                          
    General and administrative:
                         
       Stock compensation*
   
137
    
149
    
463
    
454
  
       Other G&A
    
1,858
    
2,009
    
5,929
    
5,542
  
       Total G&A
   
1,995
    
2,158
    
6,392
    
5,996
  
    Total operating expenses
   
12,665
    
9,531
    
35,125
    
31,030
  
Operating loss
   
(10,709
)
  
(5,319
)
  
(29,256
)
  
(17,577
)
 
                          
    Other income, net
   
769
    
561
    
2,379
    
1,576
  
    Income tax benefit
    
393
    
308
    
393
    
308
  
Net loss
 
$
(9,547
)
$
(4,450
)
$
(26,484
)
$
(15,693
)
Basic and diluted loss per share
 
$
(0.28
)
$
(0.13
)
$
(0.77
)
$
(0.56
)
Shares used in calculation of loss per share:
                          
    Basic and diluted
   
34,341
   
33,980
    
34,287
    
28,196
  
 
                          

*The Company records stock compensation in accordance with APB 25 and accordingly recognizes no compensation expense for the option grants when the options granted have an exercise price equal to the fair market value at the date of grant. During both 2005 and 2004, stock compensation expenses included restricted stock granted to certain officers, and options granted to non-employee consultants. A portion of the 2004 stock compensation expense reported in the Condensed Consolidated Statements of Operations was related to certain awards granted in 1997 that were fully vested by December 31, 2004 and was accounted for using the variable method of accounting. 
 
 

NEUROGEN CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
(unaudited)

 
September 30, 2005
  
December 31, 2004
  
Assets
        
         
Cash and cash equivalents
$12,113
  
$14,831
  
Marketable securities
112,040
  
136,954
  
      Total cash and marketable securities
124,153
  
151,785
  
Receivables from corporate partners
198
  
286
  
Other current assets, net
2,102
  
2,524
  
      Total current assets
126,453
  
154,595
  
         
Net property, plant and equipment
28,621
  
28,908
  
Other assets, net
100
  
320
  
      Total assets
$155,174
  
$183,823
  
         
Liabilities and Stockholders' Equity
        
Total current liabilities
$11,493
  
$10,392
  
Total long term liabilities
18,916
  
22,709
  
      Total liabilities
30,409
  
33,101
  
 
Total stockholders' equity
 
124,765
  
 
150,722
  
      Total liabilities and stockholders’ equity
$155,174
  
$183,823