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

Date of Report (Date of Earliest Event Reported):   August 4, 2005

Neose Technologies, Inc.
(Exact Name of Issuer as Specified in Charter)
Delaware	0-27718	13-3549286
(State or Other Jurisdiction of Incorporation or Organization)	(Commission File Number)	(I.R.S. Employer Identification Number)
102 Witmer Road, Horsham, Pennsylvania		19044
(Address of Principal Executive Offices)		(Zip Code)
(215) 315-9000
(Registrant’s Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o	Written communications pursuant to Rule 425 under the Securities Act
o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act
o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

Item 2.02 – Results of Operations and Financial Condition.

          On August 4, 2005, Neose Technologies, Inc. (the “Company”) announced financial results for the quarter ended June 30, 2005.  A copy of the press release announcing the Company’s financial results is attached hereto as Exhibit 99.1 and incorporated herein by reference.

Item 2.05 – Costs Associated with Exit or Disposal Activities.

          The Company also announced on August 4, 2005, that it had implemented a restructuring of operations to enable an enhanced focus on next-generation proteins, to allow for the anticipated transfer of production of proteins and reagents to its collaborative partners and contract manufacturers now that its programs are more mature, and to reduce cash burn. These actions were approved by the Company’s Board of Directors on August 2, 2005, and are supplementary to previously announced actions to reduce executive cash-based compensation for 2005 and capital spending.

          Upon completion of the restructuring during the fourth quarter of 2005, the Company will have reduced the size of its workforce by approximately 25% since March 31, 2005 and expects to realize annualized savings of between $6 million and $8 million. The Company estimates that it will incur cash restructuring costs related to personnel of approximately $1.8 million, including severance costs and the costs of short and long term retention packages offered to employees. Most of the restructuring costs will be reflected in the Company’s operating results for the quarter ending September 30, 2005.

          As part of the restructuring, the Company will centralize research activities in Horsham, Pennsylvania by ending operations in its leased San Diego facility. Following the manufacture of Phase II clinical material of NE-180, expected to be completed during the third quarter of 2005, the Company’s requirements for internally manufactured products will be substantially lower than the capacity of its 24,000 square-foot pilot manufacturing facility. The Company will evaluate alternatives relative to its current headquarters and pilot manufacturing facility, which it owns subject to a mortgage.  Such alternatives include the potential disposition of the facility and further consolidation of the Company’s research, development and administrative operations into a currently leased facility that is also located in Horsham.

          A copy of the press release announcing the restructuring is attached hereto as Exhibit 99.2 and incorporated herein by reference.

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Item 2.06 – Material Impairments.

          As a result of the restructuring described in Item 2.05, above, the Company expects to record, during the second half of 2005, non-cash property and equipment impairment charges.  The amounts of such impairment expenses cannot be estimated at the present time.

Item 9.01 – Financial Statements and Exhibits.

(a)	Financial Statements of Businesses Acquired: None
(b)	Pro Forma Financial Information: None
(c)	Exhibits: Reference is made to the Exhibit Index annexed hereto and made a part hereof.

Neose “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995:  Statements in this Current Report on Form 8-K regarding the Company’s business that are not historical facts, including, but not limited to, statements regarding the restructuring and the timing and amount of restructuring charges, write-downs and impairment charges that the Company expects to incur in connection with the restructuring, are “forward-looking statements” that involve risks and uncertainties, including without limitation the risk that the Company will not receive clearance from the FDA to initiate a Phase I clinical trial for NE-180, the risk that the Company will not meet its preclinical development timelines for its proprietary drug candidates, including GlycoPEG-GCSF, and the risk that the Company will incur unexpected charges or will have unexpected expenditures related to the restructuring upon the completion of further analysis with respect to the restructuring generally and the Company’s assets specifically .  For a discussion of these risks and uncertainties, any of which could cause the Company’s actual results to differ from those contained in the forward-looking statement, see the section of Neose’s Annual Report on Form 10-K for the year ended December 31, 2004, entitled “Factors Affecting the Company’s Prospects” and discussions of potential risks and uncertainties in the Company’s subsequent filings with the SEC.

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Signatures

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

	NEOSE TECHNOLOGIES, INC.
Date: August 5, 2005	By	/s/ C. BOYD CLARKE
		C. Boyd Clarke
		President and Chief Executive Officer

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Index to Exhibits

Exhibit No.	Description
Exhibit 99.1	Press Release dated August 4, 2005 announcing the Company’s financial results for the quarter ended June 30, 2005
Exhibit 99.2	Press Release dated August 4, 2005 announcing the Company’s restructuring plan

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EX-99.1

EXHIBIT 99.1

NEOSE TECHNOLOGIES REPORTS SECOND QUARTER FINANCIAL RESULTS

HORSHAM, PA, August 4, 2005 — Neose Technologies, Inc. (NasdaqNM: NTEC) today announced financial results for the second quarter and six months ended June 30, 2005.

For the quarter ended June 30, 2005, the Company reported a net loss of $10,285,000, or $0.31 per basic and diluted share, compared to a net loss of $10,326,000, or $0.47 per basic and diluted share, for the same period in 2004. The decreased net loss for the 2005 period was primarily due to increased revenues of $529,000, decreased general and administrative expenses of $518,000, and increased interest income of $288,000, all of which were partially offset by $1,199,000 of increased research and development expenses during the 2005 period.

The Company reported revenues of $1,420,000 for the second quarter of 2005, compared to $891,000 for the second quarter of 2004.  The increase in revenues for the 2005 period was primarily due to revenues recognized under the Company’s collaboration with BioGeneriX AG, which began late in the second quarter of 2004. The increase in research and development expenses during the 2005 period resulted from higher personnel costs, and increased purchases of outside services, including preclinical studies, and research supplies associated with the Company’s proprietary drug development programs. Also contributing to the 2005 increase was higher depreciation expenses relating to improvements made at the Company’s leased facility in Horsham, Pennsylvania, which was occupied in April 2004. General and administrative costs decreased by $518,000 during the 2005 period due to lower patent legal and consulting fees. The $288,000 increase in interest income during the 2005 period was due to a higher average cash balance, as well as higher interest rates.

For the six months ended June 30, 2005, the Company reported a net loss of $21,552,000, or $0.71 per basic and diluted share, compared to a net loss of $19,829,000, or $0.94 per basic and diluted share, for the same period in 2004. The Company reported revenues of $2,768,000 for the first six months of 2005, compared to $2,141,000 for the same period in 2004. The increase in revenues for the 2005 period was primarily due to revenues recognized under the Company’s collaboration with BioGeneriX, which began late in the second quarter of 2004.

Operating expenses for the six months ended June 30, 2005 were $24,396,000, compared to $21,852,000 for the same period in 2004. Research and development expenses for the six months ended June 30, 2005 increased to $18,612,000 from $15,666,000 in the comparable 2004 period. The increase was primarily due to higher personnel costs, as well as increased

NEOSE TECHNOLOGIES, INC. Page 2

purchases of outside services, including preclinical studies and consulting. Also contributing to the 2005 increase was higher depreciation expenses relating to improvements made at the Company’s leased facility in Horsham, Pennsylvania, which was occupied in April 2004.

The Company’s marketing, general, and administrative expenses were $5,784,000 for the six months ended June 30, 2005, compared to $6,186,000 for the same period last year. The decrease for the 2005 period was primarily due to lower patent legal expenses.

The Company ended the second quarter with $54,107,000 in cash, cash equivalents, and marketable securities.

Conference Call

The Company will host a conference call at 5:00 p.m. (EDT) on August 4, 2005, to discuss the second quarter financial results and update investors on company developments.  The dial-in number for domestic callers is (888) 202-2422. The dial-in number for international callers is (913) 981-5592.  A replay of the call will be available for 7 days beginning approximately three hours after the conclusion of the call. The replay number for domestic callers is (888) 203-1112 using the passcode 4009646. The replay number for international callers is (719) 457-0820, also using the passcode 4009646.  Live audio of the conference call will be simultaneously broadcast over the Internet through First Call Events, which can be accessed via the following link:

http://phx.corporate-ir.net/phoenix.zhtml?c=60494&p=irol-calendar

To listen to the live call, please go to the web site at least fifteen minutes early to register, download, and install any necessary audio software.  For those who cannot listen to the live broadcast, a replay will be available shortly after the call.  The call will also be available on the Investor Relations/Audio Archives page of the Neose website at www.neose.com.

About Neose

Neose is a biopharmaceutical company using its proprietary enzymatic technologies to develop improved drugs, focusing primarily on therapeutic proteins.  Neose uses its GlycoAdvance® and GlycoPEGylation™ technologies to develop improved versions of drugs with proven safety and efficacy.  Neose intends to apply its technologies to products it is developing on its own and to products it co-develops and co-owns with others.  It also expects to make its technologies available, through strategic partnerships, to improve the products of other parties.  Neose’s first two proprietary candidates are NE-180 (GlycoPEG-EPO), a long-acting version of erythropoietin, and GlycoPEG-GCSF, a long-acting version of granulocyte colony stimulating factor (G-CSF).

NEOSE TECHNOLOGIES, INC. Page 3

Statements of Operations
(in thousands, except per share amounts)
(unaudited)

	Three months ended June 30,						Six months ended June 30,
	2005			2004			2005			2004
Revenue from collaborative agreements	$	1,420		$	891		$	2,768		$	2,141
Operating expenses:
Research and development		8,987			7,788			18,612			15,666
General and administrative		2,806			3,324			5,784			6,186
Total operating expenses		11,793			11,112			24,396			21,852
Operating loss		(10,373	)		(10,221	)		(21,628	)		(19,711	)
Other income		—			—			22			—
Interest income		419			131			723			236
Interest expense		(331	)		(236	)		(669	)		(354	)
Net loss	$	(10,285	)	$	(10,326	)	$	(21,552	)	$	(19,829	)
Basic and diluted net loss per share	$	(0.31	)	$	(0.47	)	$	(0.71	)	$	(0.94	)
Weighted-average shares outstanding used in computing basic and diluted net loss per share		32,782			22,146			30,378			21,050

NEOSE TECHNOLOGIES, INC. Page 4

Condensed Balance Sheets
(in thousands)
(unaudited)

	June 30, 2005		December 31, 2004
Assets
Cash, cash equivalents and marketable securities	$	54,107	$	45,048
Accounts receivable and other current assets		1,889		2,768
Total current assets		55,996		47,816
Property and equipment, net		39,015		41,133
Intangible and other assets, net		1,257		1,782
Total assets	$	96,268	$	90,731
Liabilities and Stockholders’ Equity
Current liabilities	$	10,426	$	11,897
Long-term debt and capital lease obligations		11,714		13,759
Deferred revenue, net of current portion		3,526		3,688
Other liabilities		502		533
Total liabilities		26,168		29,877
Stockholders’ equity		70,100		60,854
Total liabilities and stockholders’ equity	$	96,268	$	90,731

CONTACTS:

Neose Technologies, Inc.

     A. Brian Davis

     Sr. Vice President and Chief Financial Officer

     (215) 315-9000

     Barbara Krauter

     Manager, Investor Relations

     (215) 315-9004

For more information, please visit www.neose.com.

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EX-99.2

EXHIBIT 99.2

NEOSE TECHNOLOGIES ANNOUNCES RESTRUCTURING OF OPERATIONS

PROVIDES UPDATE ON CORPORATE OBJECTIVES

HORSHAM, PA, August 4, 2005 — Neose Technologies, Inc. (NasdaqNM: NTEC) today announced that it has implemented a restructuring of operations and updated its key operational objectives.

The restructuring has been implemented to enable an enhanced focus by the Company on next-generation proteins, to allow for the anticipated transfer of production of proteins and reagents to its collaborative partners and contract manufacturers now that its programs are more mature, and to reduce cash burn. These actions are supplementary to previously announced actions to reduce executive cash-based compensation for 2005 and capital spending. Upon completion of the restructuring, Neose will have reduced the size of its workforce by approximately 25% since the end of the first quarter. 

“While necessary to allow us to continue to develop our proprietary protein therapeutic candidates, this is a painful decision,” said C. Boyd Clarke, Neose’s president, chief executive officer, and chairman. “The employees affected by this restructuring have contributed significantly to the Company, and we will miss working with them. While we continue to be confident about the prospects of NE-180 and are sustaining our guidance provided last month, we have reached the stage of our evolution where we have an over-capacity relative to the near-term requirements of our protein product pipeline.  Consistent with our development plan for NE-180, we have begun to identify potential suppliers of NE-180 in Europe to begin the scale-up required for supply of material for Phase III clinical trials and commercial launch. We would expect substantially all of those activities to occur during 2006 and 2007, once the FDA has cleared us to commence clinical trials, and assuming the data emerging from those Phase I and II clinical trials are positive. The savings generated by this restructuring should allow us to go further in the development of NE-180 before it would be obligatory to partner this program,” continued Clarke.

As part of the restructuring, the Company will centralize its research activities in Horsham, Pennsylvania by ending operations in its leased San Diego facility. In addition, as a component of the Company’s enhanced focus on the use of its GlycoAdvance® and GlycoPEGylation™ technologies to develop next-generation proteins, the Company has decided to pursue divestiture or cessation of development of certain components of its technology that are not fundamental to its protein-based strategy, including the potential spin-out of its glycolipids program. This program, while still early in research, has generated promising leads for the treatment of Parkinson’s disease and other central nervous system diseases.

NEOSE TECHNOLOGIES, INC. Page 2

Following the manufacture of Phase II clinical material of NE-180, expected to be completed during the third quarter of 2005, the Company’s requirements for internally manufactured products will be substantially lower than the capacity of its 24,000 square-foot pilot manufacturing facility. Therefore, the Company will evaluate alternatives relative to its current headquarters and pilot manufacturing facility, which the Company owns subject to a mortgage, including the potential disposition of the facility and further consolidation of its research, development and administrative operations into a currently leased facility that is also located in Horsham. As a result of the restructuring, the Company expects to record, during the second half of 2005, non-cash property and equipment impairment charges, which the Company is unable to estimate at this time.

After achieving the full benefits of the restructuring during the fourth quarter of 2005, the Company expects to realize annualized savings of between $6 million and $8 million. Net cash utilization for the second half of 2005 is expected to average approximately $9 million per quarter, which includes the cash effect of restructuring costs and does not take into account any new partnering activities, compared to an average net cash utilization during the first half of 2005 of approximately $10.5 million per quarter, excluding the effect of proceeds from equity issuances and purchases of marketable securities. The Company estimates that it will incur cash restructuring costs of approximately $1.8 million, most of which will be reflected in its operating results during the third quarter of 2005.

Commenting on the Company’s operational objectives, Mr. Clarke said, “While we have not received a formal written communication from the FDA concerning NE-180, we continue to believe that initiation of our Phase I clinical trial will be delayed by at least one quarter. As for our GlycoPEG-GCSF program, we are in the process of reviewing the preclinical development and regulatory filing timeline, as well as the evolving regulatory landscape in Europe, with BioGeneriX AG, our collaborative partner. Although the regulatory strategy is still being finalized, we believe it is prudent to modify until the first quarter of 2006 the timing for a regulatory submission in a European country.  All other objectives are on track.  Indeed, we are able to confirm that early preclinical work has demonstrated that the Company’s version of a long-acting alpha-interferon has a preclinical profile similar to the current market leader, PEGasys®.  We will be using this data in discussions with potential partners for this program.”

NEOSE TECHNOLOGIES, INC. Page 3

Conference Call

The Company will host a conference call at 5:00 p.m. (EDT) on August 4, 2005, to discuss the second quarter financial results and update investors on company developments.  The dial-in number for domestic callers is (888) 202-2422. The dial-in number for international callers is (913) 981-5592.  A replay of the call will be available for 7 days beginning approximately three hours after the conclusion of the call. The replay number for domestic callers is (888) 203-1112 using the passcode 4009646. The replay number for international callers is (719) 457-0820, also using the passcode 4009646.  Live audio of the conference call will be simultaneously broadcast over the Internet through First Call Events, which can be accessed via the following link:

http://phx.corporate-ir.net/phoenix.zhtml?c=60494&p=irol-calendar

To listen to the live call, please go to the web site at least fifteen minutes early to register, download, and install any necessary audio software.  For those who cannot listen to the live broadcast, a replay will be available shortly after the call.  The call will also be available on the Investor Relations/Audio Archives page of the Neose website at www.neose.com.

About Neose

Neose is a biopharmaceutical company using its proprietary enzymatic technologies to develop improved drugs, focusing primarily on therapeutic proteins.  Neose uses its GlycoAdvance® and GlycoPEGylation™ technologies to develop improved versions of drugs with proven safety and efficacy.  Neose intends to apply its technologies to products it is developing on its own and to products it co-develops and co-owns with others.  It also expects to make its technologies available, through strategic partnerships, to improve the products of other parties.  Neose’s first two proprietary candidates are NE-180 (GlycoPEG-EPO), a long-acting version of erythropoietin, and GlycoPEG-GCSF, a long-acting version of granulocyte colony stimulating factor (G-CSF). 

CONTACTS:

Neose Technologies, Inc.

     A. Brian Davis

     Sr. Vice President and Chief Financial Officer

     (215) 315-9000

     Barbara Krauter

     Manager, Investor Relations

     (215) 315-9004

For more information, please visit www.neose.com.

Neose “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995:  Statements in this press release regarding our business that are not historical facts, including, but not limited to, statements regarding our restructuring and the timing and amount of restructuring charges, write-downs and impairment charges that we expect to incur in connection with the

NEOSE TECHNOLOGIES, INC. Page 4

restructuring, are “forward-looking statements” that involve risks and uncertainties, including without limitation the risk that we will not receive clearance from the FDA to initiate a Phase I clinical trial for NE-180, the risk that we will not meet our preclinical development timelines for our proprietary drug candidates, including GlycoPEG-GCSF, and the risk that we will incur unexpected charges or will have unexpected expenditures related to the restructuring upon the completion of further analysis with respect to the restructuring generally and our assets specifically .  For a discussion of these risks and uncertainties, any of which could cause our actual results to differ from those contained in the forward-looking statement, see the section of Neose’s Annual Report on Form 10-K for the year ended December 31, 2004, entitled “Factors Affecting the Company’s Prospects” and discussions of potential risks and uncertainties in Neose’s subsequent filings with the SEC.

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