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): November 16, 2006

Cellegy Pharmaceuticals, Inc.

(Exact Name of Registrant as Specified in Charter)

Delaware	0-26372	82-0429727
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

2085B Quaker Pointe Drive Quakertown, Pennsylvania	18951
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (215) 529-6084

1800 Byberry Road, Building 13

Huntingdon Valley, PA 19006

(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 (see General Instruction A.2. below):

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

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

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

o 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 15, 2006, the Registrant reported its results of operations for its third quarter ended September 30, 2006. A copy of the press release issued by the Registrant concerning the foregoing results is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any filing of the Registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference to such filing. The information in this report, including the exhibit hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.

Item 9.01 Financial Statements and Exhibits

Exhibit 99.1Press Release dated November 15, 2006

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 hereunto duly authorized.  

	CELLEGY PHARMACEUTICALS, INC.
Date: November 16, 2006	By:	/s/ Robert J. Caso
		Robert J. Caso
		Vice President, Finance (Duly Authorized Officer)

EX-99.1

Cellegy Reports September 30, 2006 Quarter Financial Results

Quakertown, Pennsylvania - November 15, 2006 --Cellegy Pharmaceuticals, Inc. (CLGY.OB) announced its third quarter 2006 financial results today.

Revenues for the three months ended September 30, 2006 were $172,000 compared to $1,738,000 during the same period in 2005. Prior year revenues for the third quarter included $1,252,000 in Biosyn grant revenue, $257,000 in product sales and $109,000 in licensing revenues.

Revenues for the nine months ended September 30, 2006 were $2,635,000 compared to $10,804,000 for the same period in 2005. These included licensing revenues of $452,000 and $6,950,000 for the nine months ended September 30, 2006 and 2005, respectively.

Research and development expenses for the three months ended September 30, 2006 and 2005, were $338,000 and $1,816,000, respectively. The decrease was primarily attributable to reduction in research and development salary expense, professional fees and clinical testing expenses.

Research and development expenses for the nine months ended September 30, 2006 and 2005 were $2,244,000 and $6,855,000, respectively. The decrease was primarily attributable to current period reductions in research and development salary expense, professional fees and clinical testing fees.

Selling, general and administrative expenses for the quarter ended September 30, 2006 and 2005 were $955,000 and $2,471,000, respectively. The decrease of $1,350,000 was primarily attributable to current period reductions in SG&A salary expense and operating expenses.

For the nine months ended September 30, 2006 and 2005, selling, general and administrative expenses were $4,526,000 and $6,764,000, respectively. The decrease resulted primarily from a reduction in litigation and other related expenses.

Net loss from continuing operations for the quarter ended September 30, 2006 was $1,640,000 or ($0.05) per basic and diluted common share based on 29,833,000 shares. Cellegy had a net loss of $2,867,000 or ($0.10) per basic and diluted common share based on 29,832,000 shares during the same three-month period in 2005.

The Company had cash and cash equivalents of $830,000 at September 30, 2006 compared to $2,251,000 at December 31, 2005 and $2,305,000 at September 30, 2005.

Due to its cash position and negative operating cash flows, Cellegy received a going concern qualification in the report of its independent registered public accounting firm included in the Annual Report on Form 10-K for the year ended December 31, 2005. Cellegy believes that available cash resources will be adequate to satisfy its capital needs through at least the end of November 2006. Subject to the terms and conditions of the Asset Purchase Agreement with Strakan International Limited, the Company has agreed to sell to ProStrakan all of its right, title and interest in and to the assets used in connection with or relating to the research, development and commercialization of nitroglycerin/nitric oxide and other related pharmacological products for pain management applications and testosterone gels for treatment of male hypogonadism, and for certain female sexual dysfunction conditions, as currently conducted and as currently proposed to be conducted by Cellegy, including those assets relating to Cellegy’s nitroglycerin/nitric oxide and related pharmacological products marketed under the name Rectogesic® and proposed to be marketed under the name Cellegesic® and Cellegy’s testosterone gels marketed under the name Tostrex™ and proposed to be marketed under the names Tostran™ or Fortigel™ and Cellegy’s product candidate Tostrelle.

A special meeting of stockholders to consider and vote on the proposed transaction with ProStrakan is scheduled to be held on November 22, 2006. There is no assurance that the proposed transaction will be approved by the shareholders. If the proposed transaction is not approved by the shareholders, a significant portion of the Company’s liabilities would become immediately due and payable, including promissory notes reflecting amounts due to PDI, Inc. and ProStrakan. In this event, the Company would most likely be unable to meet its obligations to its creditors.

About Cellegy

Cellegy Pharmaceuticals is a specialty biopharmaceutical company that develops and commercializes prescription drugs for the treatment of women’s health care conditions, including sexual dysfunction, HIV prevention and gastrointestinal disorders. Savvy^® (C31G vaginal gel), a novel microbicide gel product for contraception and the reduction in transmission of HIV in women, is currently undergoing a Phase 3 clinical study in the United States for contraception.

Forward-Looking Statements

This press release contains forward-looking statements. Investors are cautioned that these forward-looking statements are subject to numerous risks and uncertainties, known and unknown, which could cause actual results and developments to differ materially from those expressed or implied in such statements. For more information regarding risk factors, refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2005, Quarterly Report on Form 10-Q for the quarter ended June 30, 2006 and other filings with the Securities and Exchange Commission.

Where to find additional information about the transaction

Cellegy has filed a definitive proxy statement with the Securities and Exchange Commission in connection with the proposed transaction with ProStrakan. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, CELLEGY’S STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT REGARDING THE PROPOSED TRANSACTION CAREFULLY AND IN ITS ENTIRETY BECAUSE IT CONTAINS IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and stockholders may obtain free copies of the proxy statement and other relevant documents (when they become available) and other documents filed with the Securities and Exchange Commission at the Securities and Exchange Commission's web site at: www.sec.gov. In addition, investors and stockholders may obtain free copies of the documents filed with the Securities and Exchange Commission by Cellegy by contacting the persons identified below. Cellegy’s directors and executive officers may be deemed to be participants in the solicitation of proxies from its stockholders in connection with the proposed transaction. Information regarding the interests of directors and executive officers in the transaction is included in the proxy statement of the Company. Additional information regarding directors and executive officers of Cellegy is also included in the Company’s annual report on Form 10-K for the year ended December 31, 2005, filed with the Securities and Exchange Commission, which is available as described above.

For More Information:

Cellegy Pharmaceuticals:

Robert J. Caso (215) 529-6084

Vice President, Finance & CFO

Richard C. Williams

Chairman and Interim CEO

CELLEGY PHARMACEUTICALS, INC.

SUMMARY OF FINANCIAL RESULTS

SEPTEMBER 30, 2006

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands)

	September 30, 2006			December 31, 2005
Assets
Current assets:
Cash and investments	$	830		$	2,262
Other assets		415			4,188
Total assets	$	1,245		$	6,450
Liabilities and Stockholders' Deficit
Total current liabilities	$	9,120		$	9,437
Deferred revenue		3,349			3,084
Other long-term payable and derivative instrument		310			405
Stockholders' deficit		(11,534	)		(6,477	)
Total liabilities and stockholders' deficit	$	1,245		$	6,450

The accompanying notes are an integral part of these condensed Consolidated financial statements.

CELLEGY PHARMACEUTICALS, INC.

SUMMARY OF FINANCIAL RESULTS

SEPTEMBER 30, 2006

CONDENSED CONSOLIDATED BALANCE SHETS

(Amounts in thousands)

													Period from
													June 26, 1989
	Three Months Ended September 30,						Nine Months Ended September 30,						(inception) to September 30,
	2006			2005			2006			2005			2006
Total revenues	$	172		$	1,738		$	2,635		$	10,804		$	25,832
Costs and expenses:
Cost of product sales		-			197			257			241			1,945
Research and development		338			1,816			2,244			6,855			92,207
Selling, general and administrative		955			2,471			4,526			6,764			50,624
Equipment FMV adjustment		276			-			276			-			276
Acquired in-process technology		-			-			-			-			22,332
Total costs and expenses		1,569			4,484			7,303			13,860			167,384
Operating income (loss)		(1,397	)		(2,746	)		(4,668	)		(3,054	)		(141,552	)
Interest and other income		99			17			114			121			7,144
Interest and other expense		(487	)		(217	)		(924	)		(478	)		(3,082	)
Derivative revaluation		145			79			170			243			1,250
Net income income (loss)		(1,640	)		(2,867	)		(5,308	)		(3,169	)		(136,240	)
Non-cash Preferred Dividends		-			-			-			-			(1,449	)
Net income (loss) from continuing operations applicable to common stockholders	$	(1,640	)	$	(2,867	)	$	(5,308	)	$	(3,169	)	$	(137,689	)
Net income (loss) per common share:
Basic	$	(0.05	)	$	(0.10	)	$	(0.18	)	$	(0.11	)
Diluted	$	(0.05	)	$	(0.10	)	$	(0.18	)	$	(0.11	)
Weighted average number of common shares used in per share calculations:
Basic		29,833			29,832			29,832			28,048
Diluted		29,833			29,832			29,832			28,048

The accompanying notes are an integral part of these condensed Consolidated financial statements.