SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A4
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001
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)
Securities registered pursuant to Section 12(b) of
the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.025 per share (the "Common Stock")
(Title of Class)
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
filing requirements for the past 90 days.
YES X NO
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The approximate aggregate market value of the Common Stock held by
non-affiliates of the registrant was $183,571,000 as of March 1, 2002, based
upon the closing price of the Common Stock as reported on The Nasdaq National
Market on such date. This number is provided only for purposes of this report
and does not represent an admission by either the registrant or any person as to
the status of such person.
As of March 1, 2002, the registrant had 17,733,476 shares of Common Stock
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None.
Neurogen is filing this Form 10-K/A4 to:
(i) include the certifications required pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350) and the certifications
required pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange Act
of 1934, which certifications were inadvertently omitted from the Company's
January 9, 2002 filing on Form 10-K/A3, and
(ii) amend Part II to include the following words inadvertently deleted from the
end of the sixth paragraph of the Liquidity and Capital Resources section
of Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations:
"more expensive than the previous step, but actual timing and cost for
completion depends on the specific progress of each product being tested."
In accordance with Rule 12b-15 of the Securities Exchange Act of 1934, Neurogen
is also including the complete text of Item 7 and Item 14 in this Form 10-K/A.
PART II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
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.
The preparation of Neurogen's financial statements in conformity with
generally accepted accounting principles requires management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Management makes estimates in the areas of
marketable securities and investments, license and research arrangements,
collaboration costs, income taxes, accruals and stock compensation. Actual
results could differ from those estimates.
The Company believes the following critical accounting policies affect
management's more significant judgments and estimates used in the preparation of
Neurogen's financial statements:
Revenue Recognition
Each of our collaborative research, licensing and technology transfer
agreements are significant to us. The terms of such arrangements may cause our
operating results to vary considerably from period to period.
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 potential discoveries. Revenue under these
arrangements typically includes upfront non-refundable fees, ongoing payments
for specified levels of staffing for research and milestone payments upon
occurrence of certain events. The upfront fees are 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 service is maintenance, which is
recognized on a straight line basis. For a contract with multiple elements,
total contract fees are allocated to the different elements based on evidence of
fair value.
Stock-Based Compensation
The Company primarily grants qualified stock options for a fixed number of
shares to employees with an exercise price equal to the fair market value of the
shares at the date of grant. The Company has also issued restricted stock to key
executives which vest over specified service periods. The Company accounts for
grants of stock options and restricted stock in accordance with APB Opinion No.
25, "Accounting for Stock Issued to Employees," and, accordingly, recognizes no
compensation expense for such grants when the grants have an exercise price
equal to the fair market value at the date of grant.
Marketable Securities
The Company invests in U.S. government and corporate debt securities. The
fair value of these securities are subject to volatility and change. The Company
considers its investment portfolio to be available-for-sale securities as
defined in SFAS No. 115, "Accounting for Certain Investments in Debt and Equity
Securities." Marketable securities at December 31, 2001 and 2000 consisted of
debt securities with maturities of three months to four years. Securities are
available-for-sale and are carried at fair value with the unrealized
gains/losses reported as other comprehensive income. Realized gains and losses
have been determined by the specific identification method and are included in
investment income.
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 believes its research
and development costs may increase significantly over the next several years as
its drug development programs progress. In addition, general and administrative
expenses would be expected to increase substantially to support any expanded
research and development activities.
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
The Company's fiscal 2001 operating revenues decreased 44 percent to $11.5
million from 2000 operating revenues of $20.4 million, which was an increase
from 1999 operating revenues of $10.2 million. The decrease in 2001 was
primarily due to a decrease in research and development revenues resulting from
a scheduled reduction in the Company's staffing on collaborative programs with
Pfizer (the GABA and NPY programs described below) and the related reduction in
discovery research funding, which comprised $2.9 million of operating revenues
in 2001 as compared to $8.8 million in 2000. The recognition of license fees
revenue pursuant to the Pfizer Technology Transfer Agreement (described below)
also decreased from $11.2 million in 2000 to $8.5 million in 2001. The increase
in 2000 operating revenues was primarily due to the recognition of $11.2 million
in license fees revenue under the Pfizer Technology Transfer Agreement, as
compared to $0.5 million under such agreement in 1999, offset by a slight
decrease in research funding on the GABA and NPY programs from $9.4 million in
1999 to $8.8 million in 2000.
Research and development expenses, excluding non-cash stock compensation
charges, increased 23 percent to $34.5 million in 2001 as compared to 2000, and
also increased 17 percent to $28.0 million in 2000 as compared to 1999. The
increase in 2001 was primarily due to further external development costs related
to potential drug candidates of $5.5 million compared to $1.4 million in 2000.
The increase in 2000, as well as the remainder of the increase in 2001, was due
to the Company's continued expansion of its AIDD (TM)(Accelerated Intelligent
Drug Discovery) program for the discovery of new drug candidates. Research and
development expenses represented 84 percent, 83 percent and 85 percent of total
operating expenses (excluding non-cash stock compensation charges) for the years
ended December 31, 2001, 2000 and 1999, respectively.
The Company expenses all research and development costs as incurred. While
the Company maintains a system to record the level of staffing time spent on its
research and development projects, it does not maintain a historical cost
accounting system with sufficient accuracy to reliably estimate its research and
development costs on a specific project-by-project basis. Because a significant
portion of the Company's research and development expenses, such as laboratory
supplies, travel, information systems and services and facilities costs, benefit
multiple projects and are not individually tracked to a specific project and the
Company's staff timekeeping system does not account for differences in
compensation costs between lower level technicians and more senior scientists,
the Company is unable to reliably estimate its research and development costs on
a specific project-by-project basis.
General and administrative expenses, excluding non-cash stock compensation
charges, increased 15 percent to $6.6 million in 2001 from $5.7 million in 2000
and 31 percent in 2000 from $4.4 million in 1999. These increases are attributed
to additional administrative and technical services and personnel to support the
protection of Neurogen's growing intellectual property estate and to support
Neurogen's expanding research pipeline.
Stock compensation expense, which is primarily composed of non-cash charges
to income related to the grant of restricted stock and the modification of
certain stock options, was $1.5 million in 2001, $7.1 million in 2000 and $0.1
million in 1999. In 2000 the Company recorded $6.5 million in stock compensation
expense for the vesting of restricted stock to certain employees.
Other income, consisting primarily of interest income from invested cash
and marketable securities, was $4.5 million in 2001, $5.5 million in 2000 and
$3.6 million in 1999. The differences in annual income are due primarily to
varying levels of invested funds and available interest rates.
For the year ended December 31, 2001, the Company recorded a Connecticut
income tax benefit of $1.2 million in the Statement of Operations. This benefit
is the result of recent Connecticut legislation, which allows certain companies
to obtain cash refunds from the State of Connecticut at an exchange rate of 65%
of their research and development credits in exchange for foregoing the
carryfoward of these credits into future tax years.
The Company recognized a net loss of $25.4 million for the year ended
December 31, 2001, $15.5 million for the year ended December 31, 2000, and $14.6
million for the year ended December 31, 1999. The increase in the 2001 net loss
is primarily due to the decrease in revenues and the increase in research and
development and general and administrative expenses described above. The
increase in the 2000 net loss from 1999 was due to a non-recurring, non-cash
$6.5 million charge recognized in the first quarter of 2000 upon the vesting of
137,625 shares of restricted stock granted to certain employees in 1998 and
increases in research and development and general and administrative expenses,
as explained above (net of a $0.5 million cumulative effect of change in
accounting principle, as discussed below). These increases in expenses are
partially offset by the recognition of $10.7 million in revenue under the Pfizer
Technology Transfer Agreement (described below).
In December 1999, the staff of the Securities and Exchange Commission
issued its Staff Accounting Bulletin ("SAB") No. 101, Revenue Recognition in
Financial Statements. SAB No. 101, as amended by SAB No. 101A and 101B, provides
guidance on the measurement and timing of revenue recognition in financial
statements of public companies. SAB No. 101 permits application of its guidance
to be treated as a change in accounting principle in accordance with APB Opinion
No. 20, Accounting Changes.
The Company adopted the guidance of SAB No. 101 in the fourth quarter of
2000, retroactive to January 1, 2000, and reflected a cumulative effect of
change in accounting principle on prior years of $0.5 million, related to timing
of revenue recognition on certain non-refundable up-front payments previously
recognized on a technology transfer agreement.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 2001 and 2000, cash, cash equivalents and marketable
securities were in the aggregate $105.3 and $108.8 million, respectively. The
Company's cash and other short-term investment levels decreased ratably
throughout 2001 due primarily to the increase in research and development
expenses, purchases of property, plant and equipment and the decrease in
discovery research funding and license fees from Pfizer as described above. This
decrease was offset by $17.5 million in proceeds from a commercial term mortgage
loan financing completed in December 2001 and a $10.0 million license fee
received under a collaboration and license agreement entered into with Aventis
Pharmaceuticals Inc. ("Aventis"). A total amount of $42.4 million of the
marketable securities at December 31, 2001 have maturities greater than one
year; however, the Company can and may liquidate such investments prior to
maturity to meet its strategic and/or investment objectives. The levels of cash,
cash equivalents and marketable securities 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 Company is in the early stage of product development. It has not derived any
product revenues from product sales and does not expect to derive any product
revenues for at least the next several years, if at all. Prior to deriving any
such product revenues, the Company expects to incur significant losses and
negative cash flows which in the aggregate could exceed the Company's existing
cash resources. To provide cash to fund its operations until such time as it
achieves sustainable revenues, the Company relies extensively on its ability to
develop drug discovery programs of sufficient value to either partner the
programs with pharmaceutical companies or raise capital through equity
financings.
To the extent that drug candidates progress in the Company's currently
unpartnered programs, such as its program for the treatment of inflammatory
disorders or earlier stage programs, such progress could lead to the opportunity
to partner on terms which provide capital, revenues and cash flows to the
Company or the opportunity to raise capital through equity offerings. If
unpartnered programs do not progress or do not progress on schedule, such
opportunities would be delayed and may not materialize at all.
To the extent that drug candidates progress in the Company's partnered
programs, such as the Company's insomnia program partnered with Pfizer or its
depression and anxiety program partnered with Aventis, such progress could
result in milestone payments and additional research and development funding to
the Company under the respective collaboration agreements. Such progress could
also provide the opportunity to raise capital through equity offerings. If
partnered programs do not progress or do not progress on schedule, such
opportunities would be delayed and may not materialize at all.
Lack of progress, scheduling delays or failures in any of the Company's
major programs could significantly reduce the Company's levels of revenues, cash
flows and cash available to fund its business. It could also significantly
increase the Company's cost of capital and limit its ability to raise equity
capital. All of the Company's compounds in development, whether in human
clinical trials or not, will require significant additional research,
development and testing before they can be commercialized. Furthermore, the
scope, magnitude and timing of future research and development expenses, as well
as anticipated project completion dates, are a series of steps, ranging from
pre-clinical testing to clinical studies in humans. Each step in the process is
typically more expensive than the previous step, but actual timing and cost for
completion depends on the specific progress of each product being tested.
While the Company cannot accurately predict the time required or the cost
involved in commercializing any one of its candidates, new drug development
typically takes many years and tens or hundreds of millions of dollars. In
addition, developing new drugs is an extremely uncertain process where most
candidates fail and uncertain developments such as clinical or regulatory
delays, side effects, undesirable drug properties or ineffectiveness of a drug
candidate would slow or prevent the development of a product. If we or our
partners are unable to commercialize one or more of our drug products, we will
never achieve product revenues and may eventually be unable to continue our
operations. This result would cause our shareholders to lose all or a
substantial portion of their investment.
The debt agreements entered into by the Company to date include the
commercial term mortgage loan financing in December 2001 with Webster Bank,
mentioned above, and a construction loan entered into in October 1999 with
Connecticut Innovations Inc. Total proceeds received under these agreements as
of December 31, 2001, are $22.5 million. Of these amounts received, as of
December 31, 2001, $22.4 million remained outstanding. An approximate aggregate
amount of $1.4 million is due and payable in each of the next five years.
Thereafter, approximately $15.4 million is payable in regular installments until
the scheduled maturity dates. As of December 31, 2001, 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
carryforwards, 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 carryforwards, respectively, which expire in the
years 2002 through 2021. The Company has applied to exchange year 2000
Connecticut research and development credits for cash proceeds under new
Connecticut tax law provisions (as mentioned above). 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
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. 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.
In June 1999, Neurogen and Pfizer entered into a technology transfer
agreement (the "Pfizer Technology Transfer Agreement"). Under the terms of this
agreement, Pfizer has 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 has received a
non-exclusive license for certain AIDD intellectual property and the right to
employ this technology in its own drug development programs. As of December 31,
2001, Pfizer had provided $23.5 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. As of December 31, 2001, Pfizer had 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.
On three occasions, Neurogen and Pfizer extended Neurogen's research
efforts under the 1992 and 1994 Pfizer Agreements. Pursuant to the extension
agreements, which terminated in December 2001, Neurogen received $2.9 million in
2001 (which amount is included in the above-described cumulative totals received
for the 1992 and 1994 Pfizer Agreements) for research and development funding of
the Company's GABA-based anxiolytic, cognitive enhancer and sleep disorders
projects. With the scheduled conclusions of the research funding under the
Pfizer Agreements mentioned above, employee resources have been shifted to
ongoing projects which are currently unpartnered and for which Neurogen owns all
commercial rights.
Recently Issued Accounting Pronouncements
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 has not adopted the provisions of SFAS No. 144 as of
December 31, 2001. However, the Company believes that the implementation of this
standard will not have a material effect on its results of operations and
financial position, since the impairment assessment under SFAS No. 144 is
largely unchanged from SFAS No. 121 and management is not currently aware of any
significant long-lived assets impaired or planned for disposal.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a)
(1) Financial Statements
Reference is made to the Index to Financial Statements under Item 8 in
Part II of Form 10-K/A3 filed January 9, 2003, where these documents
are listed.
(2) Financial Statement Schedule
Note: Schedules are omitted as not applicable or not required or on
the basis that the information is included in the financial statements
or notes thereto.
(3) Exhibits
See Exhibit Index.
(b) Reports on Form 8-K
The Company filed two current reports on Form 8-K on December 21, 2001 to
submit for filing News Releases of the Company dated December 20, 2001
announcing an exclusive worldwide collaboration agreement between Neurogen
and Aventis Pharma to develop new drugs for the treatment of several
disorders based on specified Company compounds, and the preliminary results
from a Phase IIA clinical study of the Company's lead drug candidate for
the treatment of anxiety disorders, where the subjects tested showed a
trend toward efficacy that did not achieve statistical significance.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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
/S/ STEPHEN R. DAVIS
By:______________________________
Stephen R. Davis
Executive Vice President and
Chief Business Officer
Date: January 21, 2003
CERTIFICATIONS
I, William H. Koster, certify that:
1. I have reviewed this annual report on Form 10-K/A3, as modified by Form
10-K/A4, of Neurogen Corporation;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report; and
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual report.
By: /s/ William H. Koster
____________________________
William H. Koster
President and
Chief Executive Officer
Date: January 20, 2003
I, Stephen R. Davis, certify that:
1. I have reviewed this annual report on Form 10-K/A3, as modified by Form
10-K/A4, of Neurogen Corporation;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report; and
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual report.
By: /s/ Stephen R. Davis
____________________________
Stephen R. Davis
Executive Vice President
and Chief Business Officer
Date: January 20, 2003
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------- ----------------------------------------------------------------------
3.1 - Restated Certificate of Incorporation, filed June 17, 1994
(incorporated by reference to Exhibit 4.1 to Registration Statement
No. 33-81268 on form S-8).
3.2 - By-Laws, as amended (incorporated by reference to Exhibit 3.6 to the
Company's Form 10-K for the fiscal year ended December 31, 1993).
10.1 - Neurogen Corporation Stock Option Plan, as amended (incorporated by
reference to Exhibit 10.1 to the Company's Form 10-K for the fiscal
year ended December 31, 1991).
10.2 - Form of Stock Option Agreement currently used in connection with the
grant of options under Neurogen Corporation Stock Option Plan
(incorporated by reference to Exhibit 10.2 to the Company's Form 10-K
for the fiscal year ended December 31, 1992).
10.3 - Neurogen Corporation 1993 Omnibus Incentive Plan, as amended
(incorporated by reference to Exhibit 10.3 to the Company's Form 10-K
for the fiscal year ended December 31, 1993).
10.4 - Form of Stock Option Agreement currently used in connection with the
grant of options under Neurogen Corporation 1993 Omnibus Incentive
Plan (incorporated by reference to Exhibit 10.4 to the Company's Form
10-K for the fiscal year ended December 31, 1993).
10.5 - Neurogen Corporation 1993 Non-Employee Directors Stock Option Program
(incorporated by reference to Exhibit 10.5 to the Company's Form 10-K
for the fiscal year ended December 31, 1993).
10.6 - Form of Stock Option Agreement currently used in connection with the
grant of options under Neurogen Corporation 1993 Non-Employee
Directors Stock Option Program (incorporated by reference to Exhibit
10.6 to the Company's Form 10-K for the fiscal year ended December 31,
1993).
10.7 - Employment Contract between the Company and Harry H. Penner, Jr.,
dated as of October 12, 1993 (incorporated by reference to Exhibit
10.7 to the Company's Form 10-K for the fiscal year ended December 31,
1993).
10.8 - Employment Contract between the Company and John F. Tallman, dated as
of December 1, 1993 (incorporated by reference to Exhibit 10.25 to the
Company's Form 10-Q for the quarterly period ended September 30,
1994).
10.9 - Form of Proprietary Information and Inventions Agreement(incorporated
by reference to Exhibit 10.31 to Registration Statement No. 33-29709
on Form S-1).
10.10 - Collaborative Research Agreement and License and Royalty Agreement
between the Company and Pfizer Inc, dated as of January 1, 1992
(CONFIDENTIAL TREATMENT REQUESTED) (incorporated by reference to
Exhibit 10.35 to the Company's Form 10-K for the fiscal year ended
December 31, 1991).
10.11 - Letter Agreement between the Company and Barry M. Bloom, dated January
12, 1994 (incorporated by reference to Exhibit 10.25 to the Company's
Form 10-K for the fiscal year ended December 31, 1993).
10.12 - Letter Agreement between the Company and Robert H. Roth, dated April
14, 1994 (incorporated by reference to Exhibit 10.26 to the Company's
Form 10-K for the fiscal year ended December 31, 1994).
10.13 - Collaborative Research Agreement and License and Royalty Agreement
between the Company and Pfizer Inc, dated as of July 1, 1994
(CONFIDENTIAL TREATMENT REQUESTED) (incorporated by reference of
Exhibit 10.1 to the Company's Form 10-Q for the quarterly period ended
June 30, 1994).
10.14 - Stock Purchase Agreement between the Company and Pfizer dated as of
July 1, 1994 (incorporated by reference to Exhibit 10.2 to the
Company's Form 10-Q for the quarterly period ended June 30, 1994).
10.15 - Collaboration and License Agreement and Screening Agreement between
the Company and Schering-Plough Corporation (CONFIDENTIAL TREATMENT
REQUESTED) (incorporated by reference to Exhibit 10.1 to the Company's
Form 8-K dated July 28, 1995).
10.16 - Lease Agreement between the Company and Commercial Building Associates
dated as of August 30, 1995 (incorporated by reference to Exhibit
10.27 to the Company's Form 10-Q for the quarterly period ended
September 30, 1995).
10.17 - Collaborative Research Agreement between the Company and Pfizer dated
as of November 1, 1995 (CONFIDENTIAL TREATMENT REQUESTED)
(incorporated by reference to Exhibit 10.1 of the Company's Form 8-K
dated November 1, 1995).
10.18 - Development and Commercialization Agreement between the Company and
Pfizer dated as of November 1, 1995 (CONFIDENTIAL TREATMENT REQUESTED)
(incorporated by reference to Exhibit 10.2 of the Company's Form 8-K
dated November 1, 1995).
10.19 - Stock Purchase Agreement between the Company and Pfizer dated as of
November 1, 1995 (incorporated by reference to Exhibit 10.3 of
the Company's Form 8-K dated November 1, 1995).
10.20 - Stock Purchase Agreement dated as of November 25, 1996 between
American Home Products Corporation, acting through its Wyeth-Ayerst
Laboratories Division, and Neurogen Corporation (CONFIDENTIAL
TREATMENT REQUESTED) (incorporated by reference to Exhibit 10.1 of
the Company's Form 8-K dated March 31, 1997).
10.21 - Technology agreement between the Company and Pfizer Inc, dated as of
June 15, 1999 (CONFIDENTIAL TREATMENT REQUEST) (Incorporated by
reference to Exhibit 10.27 to the Company's Form 10-Q for the
quarterly period ended June 30, 1999).
10.22 - Employment Contract between the Company and Alan J. Hutchison, dated
as of December 1, 1997 (incorporated by reference to Exhibit 10.28
to the Company's Form 10-K for the fiscal year ended December 31,
1999).
10.23 - Employment Contract between the Company and Stephen R. Davis, dated
as of December 1, 1997 (incorporated by reference to Exhibit 10.29
to the Company's Form 10-K for the fiscal year ended December 31,
1999).
10.24 - Employment Contract between the Company and Kenneth R. Shaw, dated
as of December 1, 1999 (incorporated by reference to Exhibit 10.30
to the Company's Form 10-K for the fiscal year ended December 31,
1999).
10.25 - Neurogen Corporation 2000 Non-Employee Directors Stock Option Program
(incorporated by reference to Exhibit 10.31 to the Company's Form
10-Q for the quarterly period ended June 30, 2000).
10.26 - Form of the Non-Qualified Stock Option Agreement currently used in
connection with the grant of options under the Neurogen Corporation
2000 Non-Employee Directors Stock Option Program (incorporated by
reference to Exhibit 10.32 to the Company's Form 10-Q for the
quarterly period ended June 30,2000).
10.27 - Registration Rights Agreement dated as of June 26, 2000 between the
Company and the Purchasers listed on Exhibit A thereto (incorporated
by reference to Exhibit 10.33 to the Company's Form 10-Q for the
quarterly period ended June 30, 2000).
10.28 - Severance Agreement between the Company and John F. Tallman, dated as
of January 15, 2001 (incorporated by reference to Exhibit 10.28 to the
Company's Form 10-Q for the quarterly period ended March 31, 2001).
10.29 - Amended and Restated Neurogen Corporation 2001 Stock Option Plan, as
amended and restated effective September 4, 2001 (incorporated by
reference to Exhibit 10.29 to the Company's Form 10-Q for the
quarterly period ended September 30, 2001).
10.30 - Form of Incentive Stock Option Agreement currently used in connection
with the grant of options under the Amended and Restated Neurogen
Corporation 2001 Stoc k Option Plan (incorporated by reference to
Exhibit 10.30 to the Company's Form 10-Q for the quarterly period
ended September 30, 2001).
10.31 - Form of the Non-Qualified Stock Option Agreement currently used in
connection with the grant of options under the Amended and Restated
Neurogen Corporation 2001 Stock Option Plan (incorporated by reference
to Exhibit 10.31 to the Company's Form 10-Q for the quarterly period
ended September 30, 2001).
10.32 - Form of Neurogen Special Committee Stock Option Plan (incorporated by
reference to Exhibit 10.32 to the Company's Form 10-Q for the
quarterly period ended September 30, 2001).
10.33 - Employment Agreement between the Company and William H. Koster, dated
as of September 4, 2001 (incorporated by reference to Exhibit 10.33 to
the Company's Form 10-Q for the quarterly period ended September 30,
2001).
10.34 - Severance Agreement between the Company and Harry H. Penner, Jr.,
dated as of September 7, 2001 (incorporated by reference to Exhibit
10.34 to the Company's Form 10-Q for the quarterly period ended
September 30, 2001).
10.35 - Collaboration and License Agreement dated as of December 11, 2001
between the Company and Aventis Pharmaceuticals Inc. (CONFIDENTIAL
TREATMENT REQUESTED) (incorporated by reference to Form 10-K/A2 for
the period ended December 31, 2001).
10.36 - Modification Agreement dated as of December 1, 2000 between Neurogen
Properties LLC and Connecticut Innovations, Incorporated (incorporated
by reference to Form 10-K/A3 for the period ended December 31, 2001).
10.37 - Construction Loan Agreement dated as of October 22, 1999 between
Neurogen Properties LLC and Connecticut Innovations, Incorporated
(incorporated by reference to Form 10-K/A3 for the period ended
December 31, 2001).
10.38 - Commercial Term Note dated as of December 21, 2001 held by the
Company and payable to Webster Bank (incorporated by reference to Form
10-K/A3 for the period ended December 31, 2001).
10.39 - Commercial Loan Agreement dated as of December 21, 2001 between
Webster Bank and the Company (incorporated by reference to Form
10-K/A3 for the period ended December 31, 2001).
21.1 - Subsidiary of the registrant(incorporated by reference to Exhibit 21.1
to the Company's Form 10-K for the fiscal year ended December 31,
1999).
23.1 - Consent of PricewaterhouseCoopers LLP, Independent Accountants
(incorporated by reference to Form 10-K/A3 for the period ended
December 31, 2001).
24.1 - Powers of Attorney of Frank C. Carlucci, Robert H. Roth, John Simon,
John F. Tallman, Robert N. Butler, Jeffrey J. Collinson , Suzanne
H. Woolsey, Mark Novitch, Barry M. Bloom, Julian C. Baker, Felix J.
Baker and Craig Saxton (incorporated by reference to Form 10-K/A3 for
the period ended December 31, 2001).
99.1 - Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
99.2 - Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
EXHIBIT 99.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Neurogen Corporation (the "Company") on
Form 10-K/A3, as modified by Form 10-K/A4, for the period ended December 31,
2001, as filed with the Securities and Exchange Commission on the date hereof
(the "Report"), I, William H. Koster, President and Chief Executive Officer of
the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or 15(d)
of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
By: /s/ William H. Koster
----------------------------
William H. Koster
President and
Chief Executive Officer
Date: January 20, 2003
EXHIBIT 99.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Neurogen Corporation (the "Company") on
Form 10-K/A3, as modified by Form 10-K/A4, for the period ended December 31,
2001, as filed with the Securities and Exchange Commission on the date hereof
(the "Report"), I, Stephen R. Davis, Executive Vice President and Chief Business
Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or 15(d)
of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
By: /s/ Stephen R. Davis
----------------------------
Stephen R. Davis
Executive Vice President and
Chief Business Officer
Date: January 20, 2003
