SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-18311
NEUROGEN CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 22-2845714
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
35 Northeast Industrial Road
Branford, Connecticut 06405
(Address of principal executive offices) (Zip Code)
(203) 488-8201
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
As of May 15, 2002 the registrant had 17,746,991 shares of Common Stock
outstanding.
NEUROGEN CORPORATION
INDEX
Part I - Financial Information
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets at March 31, 2002 and
December 31, 2001
Consolidated Statements of Operations for the three-month periods
ended March 31, 2002 and 2001
Consolidated Statements of Cash Flows for the three-month periods
ended March 31, 2002 and 2001
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Part II - Other Information
Item 1. Legal Proceedings
Item 2. Changes in Securities and Use of Proceeds
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signature
PART I - FINANCIAL INFORMATION
ITEM 1 CONSOLIDATED FINANCIAL STATEMENTS
NEUROGEN CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
(UNAUDITED)
MARCH 31, 2002 DECEMBER 31, 2001
-------------- -----------------
Assets
Current assets:
Cash and cash equivalents $ 29,757 $ 51,062
Restricted cash 1,508 1,500
Marketable securities 64,893 54,237
Receivables from corporate partners 2,753 1,554
Other current assets, net 3,371 3,027
------------- ---------------
Total current assets 102,282 111,380
Property, plant & equipment:
Land, building and improvements 30,694 30,489
Equipment and furniture 16,457 16,162
Construction in progress 380 462
--------------- ----------------
47,531 47,113
Less accumulated depreciation & amortization 13,758 13,062
--------------- ----------------
Net property, plant and equipment 33,773 34,051
Other assets, net 493 525
--------------- ----------------
Total assets $ 136,548 $ 145,956
=============== ================
See accompanying notes to consolidated financial statements.
NEUROGEN CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(UNAUDITED)
MARCH 31, 2002 DECEMBER 31, 2001
----------------- -----------------
Liabilities & Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $ 3,482 $ 3,595
Unearned revenue from corporate partners, current portion 6,631 6,699
Current portion of loans payable 1,368 1,365
----------------- ------------------
Total current liabilities 11,481 11,659
Unearned revenue from corporate partners,
net of current portion 7,385 7,885
Loans payable, net of current portion 20,686 21,029
----------------- ------------------
Total liabilities 39,552 40,573
Commitments and Contingencies
Stockholders' Equity:
Preferred stock, par value $.025 per share
Authorized 2,000 shares; none issued - -
Common stock, par value $.025 per share
Authorized 30,000 shares; issued and outstanding
17,747 shares at March 31, 2002 and 17,733 shares
at December 31, 2001 443 443
Additional paid-in capital 175,079 174,709
Accumulated deficit (76,229) (67,685)
Deferred compensation (2,520) (2,750)
Accumulated other comprehensive income 223 666
----------------- ------------------
Total stockholders' equity 96,996 105,383
----------------- ------------------
Total liabilities and stockholders' equity $ 136,548 $ 145,956
================= ==================
See accompanying notes to consolidated financial statements.
NEUROGEN CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(UNAUDITED)
THREE MONTHS THREE MONTHS
ENDED ENDED
MARCH 31, 2002 MARCH 31, 2001
---------------- ---------------
Operating revenues:
License fees $ 1,388 $ 1,250
Research and development 1,250 720
---------------- ---------------
Total operating revenues 2,638 1,970
Operating expenses:
Research and development:
Stock compensation (56) 885
Other research and development 9,452 8,668
---------------- ---------------
Total research and development 9,396 9,553
General and administrative:
Stock compensation 138 45
Other general and administrative 2,030 1,805
---------------- ---------------
Total general and administrative 2,169 1,850
---------------- ---------------
Total operating expenses 11,565 11,403
---------------- ---------------
Operating loss (8,927) (9,433)
Other income(expense):
Investment income 736 1,509
Interest expense (280) -
---------------- ---------------
Total other income,net 456 1,509
---------------- ---------------
Net loss before provision for income taxes (8,471) (7,924)
Provision for income taxes (73) -
---------------- ---------------
Net loss $ (8,544) $ (7,924)
================ ===============
Basic and diluted loss per share $ (0.49) $ (0.46)
================ ===============
Shares used in calculation of loss per share:
Basic and diluted 17,594 17,394
================ ===============
See accompanying notes to consolidated financial statements.
NEUROGEN CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(UNAUDITED)
THREE MONTHS THREE MONTHS
ENDED ENDED
MARCH 31, 2002 MARCH 31, 2001
----------------- ---------------
Cash flows from operating activities:
Net loss $ (8,544) $ (7,924)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization expense 781 640
Stock compensation expense 82 930
Other non-cash compensation expense 388 292
Changes in operating assets and liabilities:
Decrease in accounts payable and accrued expenses (113) (1,677)
Decrease in unearned revenue from corporate partners (568) -
Increase (decrease) in receivables from corporate partners (1,199) 152
(Increase) decrease in other assets, net (347) 336
Income tax benefits from exercise of stock options 345 -
----------------- ---------------
Net cash used in operating activities (9,175) (7,251)
Cash flows from investing activities:
Purchases of plant and equipment (568) (3,596)
Purchases of marketable securities (25,006) (30,405)
Maturities and sales of marketable securities 13,725 19,644
Proceeds from sales of assets 59 25
----------------- ---------------
Net cash used in investing activities (11,790) (14,332)
Cash flows from financing activities:
Principal payments under loans payable (340) -
Exercise of employee stock options - 167
----------------- ---------------
Net cash (used in) provided by financing activities (340) 167
----------------- ---------------
Net decrease in cash and cash equivalents (21,305) (21,416)
Cash and cash equivalents at beginning of period 51,062 48,086
----------------- ---------------
Cash and cash equivalents at end of period $ 29,757 $ 26,670
================= ===============
See accompanying notes to consolidated financial statements.
Neurogen Corporation
Notes to Consolidated Financial Statements
March 31, 2002
(Unaudited)
(1) BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The unaudited financial statements have been prepared from the
books and records of Neurogen Corporation (the "Company") in
accordance with generally accepted accounting principles for interim
financial information pursuant to Rule 10-01 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. These interim financial
statements should be read in conjunction with the audited financial
statements for the year ended December 31, 2001 included in the
Company's Annual Report on Form 10-K. Interim results are not
necessarily indicative of the results that may be expected for the
full fiscal year.
In August 2001, the Financial Accounting Standards Board issued
SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets." SFAS No. 144 supercedes SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed Of," in that it excludes goodwill from its impairment scope
and allows for different approaches in cash flow estimation. However,
SFAS No. 144 retains the fundamental provisions of SFAS No. 121 for
recognition and measurement of the impairment of (a) long-lived assets
to be held and used and (b) long-lived assets to be disposed of other
than by sale. Neurogen adopted the provisions of SFAS No. 144 as of
January 1, 2002. The implementation of this standard did not have any
impact on the Company's results of operations and financial position.
(2) PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the
parent company and a subsidiary, Neurogen Properties LLC, after
elimination of intercompany transactions.
(3) REVENUE RECOGNITION
The Company has entered into collaborative research agreements
which provide for the partial funding of specified projects in
exchange for the grant of certain rights related to discoveries.
Revenue under these arrangements typically includes upfront
non-refundable fees, ongoing payments for specified levels of staffing
for research and milestone payments upon the occurrence of certain
events. Since the adoption of the Securities and Exchange Commission's
Staff Accounting Bulletin No. 101, the upfront fees are generally
recognized as revenue ratably over the period of performance under the
research agreement. The research funding is recognized as revenue as
the related research effort is performed. Revenue derived from the
achievement of milestones is recognized when the milestone event
occurs.
Neurogen has also entered into technology transfer agreements
under which revenue is recognized when a contractual arrangement
exists, fees are fixed and determinable, delivery of the technology
has occurred and collectibility is reasonably assured. When customer
acceptance is required, revenue is deferred until acceptance occurs.
Where there are on-going services or obligations after delivery,
revenue is recognized over the related term of the service on a
percentage of completion basis, unless such obligation is maintenance,
which is recognized on a straight line basis. Generally, for a
contract with multiple elements, total contract fees are allocated to
the different elements based on evidence of fair value.
Revenue resulting from up-front non-refundable fees under
collaborative research agreements and all fees under technology
transfer agreements is recorded as License Fees revenue for purposes
of the financial statements. Research funding for the Company's
staffing on projects and milestone payments under collaborative
agreements are recorded as Research and Development revenues. Deferred
revenue arises from the payments received for research and development
to be conducted in future periods or for licenses of Neurogen's rights
or technology where Neurogen has continuing involvement.
(4) INCOME TAXES
In March 2002, the Company filed a revised claim with the State
of Connecticut Department of Revenue Services to exchange their 2000
research and development credits for cash at the statutorily provided
exchange rate of 65% and as a result recorded an additional net
benefit of approximately $272,000. Of this amount, approximately
$73,000 was recorded as a reduction to the tax provision and $345,000
earned from research and development qualifying expenditures resulting
from stock option exercises was recorded as a benefit to additional
paid-in capital. At March 31, 2002, Neurogen had recorded a receivable
from the State of Connecticut for $2,248,000 for the exchange of
qualifying 2000 research and development credits for which the Company
received payment in April.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Since its inception in September 1987, Neurogen has been engaged
in the discovery and development of drugs. The Company has not derived
any revenue from product sales and expects to incur significant losses
in most years prior to deriving any such product revenues. Revenues to
date have come from five collaborative research agreements, one
license agreement and one technology transfer agreement.
RESULTS OF OPERATIONS
Results of operations may vary from period to period depending on
numerous factors, including the timing of income earned under existing
or future strategic alliances, technology transfer agreements, joint
ventures or financings, if any, the progress of the Company's research
and development and technology transfer projects, technological
advances and determinations as to the commercial potential of proposed
products. Neurogen expects research and development costs to increase
significantly over the next several years as its drug development
programs progress. In addition, general and administrative expenses
necessary to support the expanded research and development activities
are generally expected to increase for the foreseeable future.
THREE MONTHS ENDED MARCH 31, 2002 AND 2001
The Company's operating revenues increased to $2.6 million for
the three months ended March 31, 2002 as compared to $2.0 million for
the same period in 2001. This difference consists of moderate
increases to both research and development revenues and license fees.
The research and development revenue recognized in 2002 relates to
research funding earned from the collaboration with Aventis
Pharmaceuticals Inc. ("Aventis"), entered into in December 2001 (the
"Aventis Agreement"), which is described below. Research and
development revenue for 2001 represents the recognition of discovery
research funding under a collaboration with Pfizer Inc ("Pfizer")
which concluded on December 31, 2001 (the GABA program described
below). The increase in 2002 license fees is due to the recognition of
$0.5 million related to an up-front payment of $10.0 million from
Aventis in December 2001, offset by a reduction in the recognition of
license fees under the Pfizer Technology Transfer Agreement (described
below).
Research and development expenses increased 9 percent to $9.5
million for the three-month period ended March 31, 2002 as compared to
$8.7 million for the same period in 2001 excluding non-cash
compensation charges which in 2001 were for modifications to stock
options made upon termination of employment of a former officer. The
increase is primarily due to increases in research and development
personnel, further development of potential drug candidates and the
Company's continued expansion of its AIDD (Accelerated Intelligent
Drug Design) Program for the discovery of new drug candidates.
Research and development expenses represented 82 percent and 83
percent of total expenses in the three month periods ended March 31,
2002 and 2001, respectively, excluding non-cash stock compensation
charges.
General and administrative expenses, excluding non-cash stock
compensation charges, increased 12 percent to $2.0 million for the
period ended March 31, 2002 compared to $1.8 million for the period
ended March 31, 2001. The increase is attributed to an increase in
external services such as legal and consulting expense to protect
Neurogen's growing intellectual property estate and to support
Neurogen's expanding research pipeline.
Stock compensation expense decreased from $0.9 million for the
three-month period ended March 31, 2001 to $0.1 million for the same
period in 2002. The 2002 compensation expense is primarily composed of
continuing non-cash charges to income related to a grant of restricted
stock in September 2001, where as the 2001 expense primarily consists
of a one-time non-cash charge to income for the modification of
certain stock options held by a retiring executive officer.
Other income decreased from $1.5 million to $0.5 million due to
lower interest rates, an increase in interest expense from a
commercial term mortgage loan agreement entered into in December 2001
secured by the Company's facilities, a reduction of realized gains on
marketable securities and a lower level of invested funds.
For the three month period ended March 31, 2002, the Company
recorded a Connecticut income tax expense of $0.07 million in the
Statement of Operations. This expense is the result of the filing in
March 2002 of a revised claim with the State of Connecticut Department
of Revenue Services to exchange the Company's 2000 research and
development credits for cash at the statutorily provided exchange rate
of 65%.
The Company recognized a net loss of $8.5 million for the three
months ended March 31, 2002 as compared with a net loss of $7.9
million for the same period in 2001. The increase in net loss is
primarily due to the decrease in investment income and the increase in
research and development expenses described above.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 2002 and December 31, 2001, cash, cash equivalents
and marketable securities were in the aggregate $94.6 million and
$105.3 million, respectively. A total amount of $43.4 million of the
marketable securities at March 31, 2002 have maturities greater than
one year, however the Company can and may liquidate such investments
prior to maturity to meet its strategies or investment objectives.
While the Company's aggregate level of cash, cash equivalents and
marketable securities decreased during the three months of 2002, these
levels have fluctuated significantly in the past and are expected to
do so in the future as a result of the factors described below.
Neurogen's cash requirements to date have been met by the
proceeds of its equity financing activities, amounts received pursuant
to collaborative research, licensing or technology transfer
arrangements, certain debt arrangements and interest earned on
invested funds. The Company's equity financing activities have
included underwritten public offerings of common stock, private
placement offerings of common stock and private sales of common stock
in connection with collaborative research and licensing agreements.
Total funding received from these financing activities was
approximately $146.6 million. The Company's expenditures have been
primarily to fund research and development and general and
administrative expenses and to construct and equip its research and
development facilities.
The debt agreements entered into by the Company to date include
commercial term mortgage loan financing in December 2001, and a
construction loan entered into in October 1999. Total proceeds
received under these agreements was $22.5 million. As of March 31,
2002, Neurogen is not engaged in any significant lease or capital
expenditure commitments.
The Company plans to use its cash, cash equivalents and
marketable securities for its research and development activities,
working capital and general corporate purposes. Neurogen anticipates
that its current cash balance, as supplemented by research funding
pursuant to its collaborative research, licensing and technology
transfer agreements, will be sufficient to fund its current and
planned operations through at least 2004. However, Neurogen's funding
requirements may change and will depend upon numerous factors,
including but not limited to, the progress of the Company's research
and development programs, the timing and results of preclinical
testing and clinical studies, the timing of regulatory approvals,
technological advances, determinations as to the commercial potential
of its proposed products, the status of competitive products and the
ability of the Company to establish and maintain collaborative
arrangements with others for the purpose of funding certain research
and development programs, conducting clinical studies, obtaining
regulatory approvals and, if such approvals are obtained,
manufacturing and marketing products. Many of these factors could
significantly increase the Company's expenses and use of cash. The
Company anticipates that it may augment its cash balance through
financing transactions, including the issuance of debt or equity
securities and further corporate alliances. No assurances can be given
that adequate levels of additional funding can be obtained on
favorable terms, if at all.
As of December 31, 2001, the Company had approximately $83.6
million and $6.1 million of net operating loss and research and
development credit carryfowards, respectively, available for federal
income tax purposes which expire in the years 2004 through 2021. The
Company also had approximately $73.3 million and $3.5 million of
Connecticut state tax net operating loss and research and development
credit carryfowards, respectively, which expire in the years 2002
through 2021. The Company applied to exchange year 2000 Connecticut
research and development credits for cash proceeds under new
Connecticut tax law provisions (as mentioned above) and received a
payment from the State of Connecticut of $2.2 million in April 2002
for this exchange. Because of "change in ownership" provisions of the
Tax Reform Act of 1986, the Company's utilization of its net operating
loss and research and development credit carryforwards may be subject
to an annual limitation in future periods.
COLLABORATIVE RESEARCH AGREEMENTS
Aventis
-------
In December 2001, Neurogen entered into a collaboration and
license agreement with Aventis (the "Aventis Agreement") pursuant to
which Aventis made an initial payment of $10 million and agreed, among
other things, to fund a specified level of resources for at least
three years for Neurogen's program for the discovery and research of
CRF1 receptor-based drugs for a broad range of applications, including
the therapeutic treatment of depression and anxiety disorders. Aventis
has the option to extend the discovery and research effort for an
additional two years. As of March 31, 2002, Aventis has provided $0.2
million of research funding to the Company. Neurogen is also eligible
to receive milestone payments if certain compound discovery, product
development or regulatory objectives are achieved subject to the
collaboration. In return, Aventis received the exclusive worldwide
rights to develop, manufacture and market collaboration drugs that act
through the CRF1 receptor, with no limitations as to the therapeutic
indications for which the drugs may be used. Aventis will pay Neurogen
royalties based upon net sales levels, if any, for collaboration
products. Also under the agreement, Aventis is responsible for funding
the cost of development, including clinical trials, manufacturing and
marketing of collaboration products, if any.
Pfizer
------
In June 1999, Neurogen and Pfizer entered into a technology
transfer agreement (the "Pfizer Technology Transfer Agreement"). Under
the terms of this agreement, Pfizer agreed to pay Neurogen a total of
up to $27.0 million over a three year period for the licensing and
transfer to Pfizer of certain of Neurogen's AIDD technologies for the
discovery of new drugs, along with the installation of an AIDD system.
Additional payments are also possible upon Pfizer's successful
utilization of this technology. Pfizer received a non-exclusive
license to certain AIDD intellectual property and the right to employ
this technology in its own drug development programs. As of March 31,
2002, Pfizer had provided $24.2 million in license fees pursuant to
the Pfizer Technology Transfer Agreement.
In 1992, Neurogen entered into a collaborative research agreement
with Pfizer (the "1992 Pfizer Agreement") pursuant to which Pfizer
made a $13.8 million equity investment in the Company and agreed,
among other things, to fund a specified level of resources for up to
five years (later extended as described below) for Neurogen's research
programs for the discovery of GABA-based drugs for the treatment of
anxiety and cognitive disorders. In 1994, Neurogen and Pfizer entered
into a second collaborative research agreement (the "1994 Pfizer
Agreement") pursuant to which Pfizer made a $9.9 million equity
investment in the Company and agreed, among other things, to fund a
specified level of resources for up to four years (later extended as
described below) for Neurogen's research program for the development
of GABA-based drugs for the treatment of sleep disorders. On three
occasions, Neurogen and Pfizer extended Neurogen's research efforts
under the 1992 and 1994 Pfizer Agreements. The most recent extension
agreement terminated in December 2001. To date, Pfizer has provided
$43.2 million and $14.1 million of research funding to the Company and
$0.5 million and $0.3 million for the achievement of certain clinical
development and regulatory milestones pursuant to the 1992 and 1994
Pfizer Agreements and the extensions of such agreements, respectively.
Neurogen is eligible to receive additional milestone payments of up to
$12.0 million and $3.0 million under the 1992 and 1994 Pfizer
Agreements, respectively, if certain development and regulatory
objectives are achieved regarding its products subject to the
collaboration. In return, under the two agreements, Pfizer received
the exclusive rights to manufacture and market collaboration drugs
that act through the GABA system for the treatment of anxiety,
cognition enhancement, depression or insomnia. Pfizer will pay
Neurogen royalties based upon net sales levels, if any, for such
products. Under the agreements, Pfizer is responsible for funding the
cost of all clinical development and the manufacturing and marketing,
if any, of drugs developed from the collaborations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest rate risk. The Company's investment portfolio includes
investment grade debt instruments. These securities are subject to
interest rate risk, and could decline in value if interest rates
fluctuate. Due to the short duration and conservative nature of these
instruments, the Company does not believe that it has a material
exposure to interest rate risk. Additionally, funds available from
investment activities are dependent upon available investment rates.
These funds may be higher or lower than anticipated due to interest
rate volatility.
Capital market risk. The Company currently has no product
revenues and is dependent on funds raised through other sources. One
source of funding is through further equity offerings. The ability of
the Company to raise funds in this manner is dependent upon capital
market forces affecting the stock price of the Company.
Part II - Other Information
Item 1. Legal Proceedings
Not applicable for the first quarter ended March 31, 2002.
Item 2. Changes in Securities and Use of Proceeds
Not applicable for the first quarter ended March 31, 2002.
Item 3. Defaults upon Senior Securities
Not applicable for the first quarter ended March 31, 2002.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable for the first quarter ended March 31, 2002.
Item 5. Other Information
Not applicable for the first quarter ended March 31, 2002.
Item 6. Exhibits and Reports on Form 8-K
(a) None.
(b) The Company filed a current report on Form 8-K on January
11, 2002 regarding a commercial term mortgage loan agreement
entered into by the Company on December 21, 2001, whereby
the lender provided total gross proceeds of $17.5 million.
The loan is secured by the Company's facilities at 15 and 35
Northeast Industrial Road, Branford, CT.
SAFE HARBOR STATEMENT
Statements which are not historical facts, including statements about the
Company's confidence and strategies, the status of various product development
programs, the sufficiency of cash to fund planned operations and the Company's
expectations concerning its development compounds, drug discovery technologies
and opportunities in the pharmaceutical marketplace are "forward looking
statements" within the meaning of the Private Securities Litigations Reform Act
of 1995 that involve risks and uncertainties and are not guarantees of future
performance. These risks include, but are not limited to, difficulties or delays
in development, testing, regulatory approval, production and marketing of any of
the Company's drug candidates, the failure to attract or retain scientific
management personnel, any unexpected adverse side effects or inadequate
therapeutic efficacy of the Company's drug candidates which could slow or
prevent product development efforts, competition within the Company's
anticipated product markets, the Company's dependence on corporate partners with
respect to research and development funding, regulatory filings and
manufacturing and marketing expertise, the uncertainty of product development in
the pharmaceutical industry, inability to obtain sufficient funds through future
collaborative arrangements, equity or debt financings or other sources to
continue the operation of the Company's business, risk that patents and
confidentiality agreements will not adequately protect the Company's
intellectual property or trade secrets, dependence upon third parties for the
manufacture of potential products, inexperience in manufacturing and lack of
internal manufacturing capabilities, dependence on third parties to market
potential products, lack of sales and marketing capabilities, potential
unavailability or inadequacy of medical insurance or other third-party
reimbursement for the cost of purchases of the Company's products, and other
risks detailed in the Company's Securities and Exchange Commission filings,
including its Annual Report on Form 10-K for the year ended December 31, 2001,
each of which could adversely affect the Company's business and the accuracy of
the forward-looking statements contained herein.
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 thereunto duly authorized.
NEUROGEN CORPORATION
By:/s/ STEPHEN R. DAVIS
------------------------
Stephen R. Davis
Executive Vice President
and Chief Business Officer
Date: May 15, 2002
