Neurogen Corporation Announces Closing of $30.6 Million Financing to Advance Clinical Development Programs

BRANFORD, Conn.--(BUSINESS WIRE)--Neurogen Corporation (Nasdaq: NRGN) today announced it has closed its previously announced private placement offering of exchangeable preferred stock and warrants with selected institutional investors for gross proceeds of approximately $30.6 million before fees and expenses.

The net proceeds from this offering will be used for clinical development of existing product candidates and other general corporate purposes. The exchangeable preferred stock will automatically be exchanged for common stock upon shareholder approval, subject to certain conditions. The Company plans to seek shareholder approval for the exchange this quarter.

The $30.6 million offering was for the sale of 981,411 units. Each unit consists of one share of exchangeable preferred stock and a warrant to acquire additional shares of common stock. Upon shareholder approval, each share of preferred stock will be exchanged for 26 shares of Neurogen’s common stock, subject to certain conditions. The warrants included in the unit allow investors to purchase 50% of the number of common shares into which the purchaser’s preferred stock is exchangeable at an exercise price of $2.30 per share.

Pacific Growth Equities, LLC acted as lead placement agent, and Leerink Swann & Co., Oppenheimer & Co. and Merriman Curhan Ford & Co. acted as placement agents for the offering.

The Company has agreed to file a registration statement under the Securities Act of 1933 for the common shares to be issued upon exchange of the preferred stock and the exercise of the warrants. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.

About Neurogen

Neurogen Corporation is a drug development company focusing on small-molecule drugs to improve the lives of patients suffering from disorders with significant unmet medical need, including insomnia, anxiety, restless legs syndrome (RLS), Parkinson’s disease, and pain. Neurogen conducts its development independently and, when advantageous, collaborates with world-class pharmaceutical companies to access additional resources and expertise.

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. The words “believe”, “anticipate”, “expect”, “estimate”, “intend”, “plan”, “may”, “will” and other similar expressions generally identify forward-looking statements 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 Neurogen’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, Neurogen’s ability to retain key employees, sufficiency of cash to fund Neurogen’s planned operations, Neurogen’s ability to continue as a going concern, 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. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. 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.

Contacts

Neurogen Corp. Elaine Grimsell Dodge, 203-315-4615 edodge@nrgn.com

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