8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

November 3, 2006

Date of Report (Date of earliest event reported)

NEUROGEN CORPORATION

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation)     0-18311 (Commission File Number)     22-2845714 (I.R.S. Employer 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)

None

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:  

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))  

Item 2.02 Results of Operations and Financial Condition

On November 3, 2006, Neurogen Corporation issued a press release announcing its results of operations for the third quarter ended September 30, 2006. The information contained in Exhibit 99.1 is incorporated herein by reference.

The information in this Current Report (including Exhibit 99.1) is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing to this Item 2.02.

Item 9.01 Financial Statements and Exhibits

(c) Exhibits

99.1 Press release dated November 3, 2006.

SIGNATURES

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 hereunto duly authorized.

	NEUROGEN CORPORATION
	(Registrant)
	By:/s/ STEPHEN R. DAVIS
Date: November 3, 2006	Name: Stephen R. Davis Title: Executive Vice President and Chief Operating Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press release dated November 3, 2006.

EX-99.1

Exhibit 99.1
	Neurogen Corporation
For Immediate Release		Contact:
		Elaine Grimsell Dodge
		Neurogen Corp.
		203-315-4615
		edodge@nrgn.com

NEUROGEN CORPORATION ANNOUNCES

THIRD QUARTER 2006 FINANCIAL RESULTS

Branford, CT, November 3, 2006 — Neurogen Corporation (Nasdaq: NRGN), a drug discovery and development company, today announced financial results for the three and nine month periods ended September 30, 2006.

Neurogen recognized a net loss for the third quarter of 2006 of $10.9 million, or $0.31 per share on 34.6 million weighted average shares outstanding. This compares to a net loss during the third quarter of 2005 of $9.5 million, or $0.28 per share on 34.3 million weighted average shares outstanding. The Company recognized a net loss for the nine months ended September 30, 2006 of $37.8 million, or $1.09 per share on 34.5 million weighted average shares outstanding, as compared to a net loss of $26.5 million, or $0.77 per share on 34.3 million weighted average shares outstanding for the comparable period of 2005.

The increase in net loss reflects the impact of increased spending in Neurogen’s clinical and preclinical drug development programs. Also impacting results was the adoption on January 1, 2006 of Statement of Financial Accounting Standards 123R, “Share-based Payment” (SFAS 123R), which resulted in a non-cash operating expense of approximately $1.0 million, or an effect of approximately $ 0.03 per share for the third quarter of 2006 and of approximately $3.5 million, or an effect of approximately $0.10 per share, for the nine month period.

Neurogen’s total cash and marketable securities as of September 30, 2006 totaled $79.0 million and as of December 31, 2005 totaled $115.4 million.

William H. Koster, Ph.D, President and CEO said, "As we head into the final quarter of this year, I continue to be pleased with the momentum across our portfolio of programs. Execution of our plan continues with the recently announced Phase II studies in both our wholly-owned insomnia program and in our VR1 collaboration for pain and other indications with our partner Merck. And we continue to make progress in pre-IND testing in our wholly-owned programs for depression and obesity. We are well positioned to keep this momentum going into 2007, when we’ll expect key data from several programs.”

Operating revenue for the third quarter of 2006 increased 6% to $2.1 million from $2.0 million for the third quarter of 2005 and for the nine months ended September 30, 2006 was $7.7 million compared to $5.9 million for the comparable period of 2005. The increase in operating revenue for the quarter and the nine month period is due primarily to revenue from the Company’s collaboration with Merck (NYSE: MRK) to discover and develop VR1-based drugs for pain and other indications.

Research and development expenses for the third quarter of 2006 increased 12% to $11.6million from $10.4 million in the third quarter of 2005 and for the nine month period increased to $39.2 million from $27.9 million in the comparable period of 2005. The increase in R&D expenses for the quarter and nine month periods is due mainly to increased spending in Neurogen’s proprietary clinical and preclinical drug development programs and to expense related to the adoption of SFAS 123R.

General and administrative expenses for the third quarter of 2006 increased 15% to $2.6 million, compared to $2.3 million for the same period in 2005 and for the nine month period increased to $8.8 million from $7.2 million for the comparable period of 2005. The increase for the quarter and nine month periods is due mainly to increases in patent expenses, and salaries and benefits expenses, including expense related to the adoption of SFAS 123R.

Webcast

The Company will host a conference call and webcast to discuss third quarter results at 10:00 a.m. ET today, November 3, 2006. The webcast will be available in the Investor Relations section of www.neurogen.com and will be archived on the website until December 30, 2006. A replay of the call will be available after 1:00 pm ET on November 3, 2006 and accessible through the close of business, November 17, 2006. To replay the conference call, dial 888-286-8010, or for international callers, 617-801-6888, and use the pass code: 82631233.

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, 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.

Safe Harbor Statement

The information in this press release contains certain forward-looking statements, made pursuant to applicable securities laws, that involve risks and uncertainties as detailed from time to time in Neurogen's SEC filings, including its most recent 10-K. Such forward-looking statements relate to events or developments that we expect or anticipate will occur in the future and include, but are not limited to, statements that are not historical facts relating to the timing and occurrence of anticipated clinical trials, and potential collaborations or extensions of existing collaborations. Actual results may differ materially from such forward-looking statements 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 or pharmacokinetic properties of the Company's drug candidates or other properties of drug candidates which could make them unattractive for commercialization, advancement of competitive products, dependence on corporate partners, the Company’s ability to retain key employees, sufficiency of cash to fund the Company's planned operations and patent, product liability and third party reimbursement risks associated with the pharmaceutical industry. For such statements, Neurogen claims the protection of applicable laws. Future results may also differ from previously reported results. For example, positive results or safety and tolerability in one clinical study provides no assurance that this will be true in future studies. Neurogen disclaims any intent and does not assume any obligation to update these forward looking statements, other than as may be required under applicable law.

(Financial Tables Follow)

Page 3 of 4: Neurogen Announces Third Quarter 2006 Financial Results, November 3, 2006

NEUROGEN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except per share data)

(unaudited)

	Three Months Ended Sept. 30, 2006			Three Months Ended Sept. 30, 2005			Nine Months Ended Sept. 30, 2006			Nine Months Ended Sept. 30, 2005
Operating revenues:
License fees	$	1,115		$	906		$	3,345		$	2,719
Research revenues		962			1,050			4,362			3,150
Total operating revenues		2,077			1,956			7,707			5,869
Operating expenses:
Research and development		11,605			10,375			39,237			27,882
General and administrative		2,633			2,290			8,818			7,243
Total operating expenses		14,238			12,665			48,055			35,125
Operating loss		(12,161	)		(10,709	)		(40,348	)		(29,256	)
Other income, net		596			769			1,911			2,379
Income tax benefit		670			393			670			393
Net loss	$	(10,895	)	$	(9,547	)	$	(37,767	)	$	(26,484	)
Basic and diluted loss per share	$	(0.31	)	$	(0.28	)	$	(1.09	)	$	(0.77	)
Shares used in calculation of loss per share:
Basic and diluted		34,618			34,341			34,534			34,287

*Certain reclassifications have been made to the three and nine month periods ended September 30, 2005 to conform to the 2006 presentation.

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Page 4 of 4: Neurogen Announces Third Quarter 2006 Financial Results, November 3, 2006

NEUROGEN CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

(unaudited)

	September 30, 2006		December 31, 2005
Assets
Cash and cash equivalents	$	16,744	$	11,241
Marketable securities		62,286		104,119
Total cash and marketable securities		79,030		115,360
Receivables from corporate partners		178		157
Other current assets, net		2,026		2,892
Total current assets		81,234		118,409
Net property, plant and equipment		27,579		28,268
Other assets, net		66		87
Total assets	$	108,879	$	146,764
Liabilities and Stockholders’ Equity
Current liabilities
Unearned revenue from corporate partners, current portion		4,458		5,158
Other current liabilities		7,538		7,788
Total current liabilities		11,996		12,946
Long term liabilities
Unearned revenue from corporate partners, net of current portion		5,536		8,880
Loans payable, net of current portion		9,342		10,430
Total liabilities		26,874		32,256
Total stockholders’ equity		82,005		114,508
Total liabilities and stockholders’ equity	$	108,879	$	146,764

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