Neurogen Corp (NRGN)

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Neurogen Corporation Announces Third Quarter 2007 Financial Results
Thursday November 8, 7:00 am ET

BRANFORD, Conn.--(BUSINESS WIRE)--Neurogen Corporation (Nasdaq: NRGN - News), a drug discovery and development company, today announced financial results for the three and nine month periods ended September 30, 2007.

Neurogen recognized a net loss for the third quarter of 2007 of $7.9 million, or $0.19 per share on 41.9 million weighted average shares outstanding. This compares to a net loss during the third quarter of 2006 of $10.9 million, or $0.31 per share on 34.6 million weighted average shares outstanding. The Company recognized a net loss for the nine months ended September 30, 2007 of $40.8 million, or $0.98 per share on 41.8 million weighted average shares outstanding, as compared to a net loss of $37.8 million, or $1.09 per share on 34.5 million weighted average shares outstanding for the comparable period of 2006.

Neurogen’s total cash and marketable securities as of September 30, 2007 totaled $56.9 million and as of December 31, 2006 totaled $107.6 million.

William H. Koster, Ph.D, CEO said, "As we head into the final quarter of this year and look into the next, we look forward to advancing our potential best-in-class programs, adidiplon for insomnia and aplindore for Parkinson’s disease and Restless Legs Syndrome, as well as continuing to bring forward our first-in-class programs in VR-1 based drugs for pain and cough and MCH based drugs for obesity.”

Operating revenue for the third quarter of 2007 increased to $7.5 million from $2.1 million for the third quarter of 2006 and for the nine months ended September 30, 2007 was $15.4 million compared to $7.7 million for the comparable period of 2006. The increase in operating revenue for the quarter and the nine month period is due to the acceleration of revenue recognition from the conclusion of the research portion of the Company’s collaboration with Merck to discover and develop VR1-based drugs for pain and other indications. Merck continues pursuing VR-1 compounds discovered during the research collaboration, which concluded on August 28, 2007.

Research and development expenses for the third quarter of 2007 increased to $12.9 million from $11.6 million in the third quarter of 2006 and for the nine month period increased to $48.2 million from $39.2 million in the comparable period of 2006. The increase in R&D expenses for the quarter and nine month period is due mainly to increased spending in Neurogen’s insomnia and obesity clinical programs, as well as in preclinical drug development programs.

General and administrative expenses for the third quarter of 2007 increased to $3.0 million, compared to $2.6 million for the same period in 2006 and for the nine month period increased to $10.3 million from $8.8 million for the comparable period of 2006. The increase for the quarter and nine month periods is due primarily to increases in legal, patent, and administrative services expenses.

Neurogen continues to prepare for Phase 3 studies in its insomnia program with lead compound adipiplon and for Phase 2 studies for Parkinson’s disease and restless legs syndrome (RLS) with D2 partial agonist, aplindore. The Company’s partner for VR-1 based drugs, Merck, is planning to take the proof-of-concept compound MK 2295 (NGD 8243) forward in exploratory studies for the treatment of cough associated with upper airway disease and is focusing on a back-up compound, currently in preclinical development, for pain. In the Company’s Phase 1 obesity program, Neurogen has extended the multiple ascending dose study of NGD 4715 in order to further explore both positive changes in subjects’ lipid levels and NGD 4715’s potential for drug-drug interactions due to an observed induction of the drug metabolizing enzyme, CYP 3A4.

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