BRANFORD, Conn., Nov. 8 /PRNewswire-FirstCall/ -- Neurogen Corporation , 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. EST today, November 8, 2005. The webcast will be available in the Investor Relations section of http://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 EST 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(TM)) 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 Three Months Nine Months Nine Months Ended Ended Ended Ended September September September September 30, 2005 30, 2004 30, 2005 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, December 31, 2005 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 Total liabilities and stockholders’ equity $155,174 $183,823
Neurogen Corporation
CONTACT: Elaine Grimsell Dodge of Neurogen Corp., +1-203-315-4615,edodge@nrgn.com
Web site: http://www.neurogen.com/
