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 September 30, 1996
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 November 7, 1996, the registrant had 14,211,612 shares of Common Stock
outstanding.
NEUROGEN CORPORATION
INDEX
Page
Number
------
Part I - Financial Information
Item 1. Financial Statements.......................................... 1
Balance Sheets at September 30, 1996 and
December 31, 1995.......................................... 1,2
Statements of Operations for the three-month and nine-month
periods ended September 30, 1996 and 1995.................. 3
Statements of Cash Flows for the nine-month
periods ended September 30, 1996 and 1995.................. 4
Notes to Financial Statements............................... 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................... 6-10
Part II - Other Information
Item 1. Legal Proceedings........................................... 11
Item 2. Changes in Securities....................................... 11
Item 3. Defaults upon Senior Securities............................. 11
Item 4. Submission of Matters to a Vote of Security Holders......... 11
Item 5. Other Information........................................... 11
Item 6. Exhibits and Reports on Form 8-K............................ 11
Signature ............................................................ 13
Exhibit Index........................................................... 14-16
i
Part I - Financial Information
Item 1 - Financial Statements
Neurogen Corporation
Balance Sheets
September 30, December 31,
1996 1995
(Unaudited) (Audited)
----------- ---------
Assets
Current assets:
Cash and cash equivalents $ 53,250,639 $ 26,004,548
Marketable securities 40,649,693 39,881,172
Receivables from corporate partner 1,868,865 -
Other current assets 850,416 1,517,543
-------------- --------------
Total current assets 96,619,613 67,403,263
Marketable securities - long term - 25,731,798
Property, plant & equipment:
Land and land improvements 523,333 425,000
Building 8,621,852 8,415,766
Equipment 5,333,505 4,071,650
Furniture 207,546 166,072
Construction in progress 1,781,502 293,911
-------------- --------------
16,467,738 13,372,399
Less accumulated depreciation 2,798,067 2,146,482
-------------- --------------
Net property, plant and equipment 13,669,671 11,225,917
Other assets, net 401,327 495,384
-------------- --------------
$ 110,690,611 $ 104,856,362
============== ==============
See accompanying notes to financial statements.
1
Neurogen Corporation
Balance Sheets
September 30, December 31,
1996 1995
(Unaudited) (Audited)
----------- ---------
Liabilities & Stockholders' Equity
Current Liabilities:
Accounts payable and accrued expenses $ 1,548,651 $ 1,997,647
Unearned revenue from corporate partners 4,044,667 4,100,000
Current portion of mortgage payable 175,434 159,812
--------------- ---------------
Total current liabilities 5,768,752 6,257,459
Mortgage payable, excluding current portion 326,476 460,075
Other compensation 62,587 62,587
--------------- ---------------
Total liabilities 6,157,815 6,780,121
Stockholders' Equity:
Preferred stock, par value $.025 per share.
Authorized 2,000,000 shares; none issued - -
Common stock, par value $.025 per share.
Authorized 30,000,000 shares; issued
and outstanding 14,202,482 shares at
September 30, 1996 and 13,949,064 shares
at December 31, 1995 355,062 348,727
Additional paid-in capital 107,614,380 106,039,959
Accumulated deficit (3,352,390) (8,412,660)
Unrealized gain (loss) on marketable securities (84,256) 100,215
--------------- ---------------
Total stockholders' equity 104,532,796 98,076,241
--------------- ---------------
$ 110,690,611 $ 104,856,362
=============== ===============
See accompanying notes to financial statements.
2
Neurogen Corporation
Statements of Operations
Three Months Three Months
Ended Ended
Sept. 30, 1996 Sept. 30, 1995
(Unaudited) (Unaudited)
----------- -----------
Operating revenues:
License fees $ - $ -
Research and Development 3,510,532 2,644,667
--------------------------------------------------
Total operating revenues 3,510,532 2,644,667
Operating Expenses:
Research and development 3,577,608 3,660,341
General and administrative 860,615 654,453
---------------------- -----------------------
Total operating expenses 4,438,223 4,314,794
Other income (expense):
Investment income 1,273,806 647,436
Interest expense (13,656) (17,020)
---------------------- -----------------------
Total other income, net 1,260,150 630,416
---------------------- -----------------------
Income (loss) before provision for income taxes 332,459 (1,039,711)
Provision for income taxes - -
---------------------- -----------------------
Net income (loss) 332,459 (1,039,711)
Earnings (loss) per share:
Primary $ 0.02 $ (0.09)
====================== =======================
Fully diluted $ 0.02 $ -
====================== =======================
Shares used in calculation of
earnings (loss) per share:
Primary 15,385,000 11,359,000
====================== =======================
Fully diluted 15,449,000 -
====================== =======================
Nine Months Nine Months
Ended Ended
Sept. 30, 1996 Sept. 30, 1995
(Unaudited) (Unaudited)
----------- -----------
Operating revenues:
License fees $ 3,000,000 $ 14,000,000
Research and Development 10,699,865 6,384,000
--------------------------------------------
Total operating revenues 13,699,865 20,384,000
Operating Expenses:
Research and development 10,009,376 9,550,032
General and administrative 2,251,881 2,160,755
------------------- --------------------
Total operating expenses 12,261,257 11,710,787
Other income (expense):
Investment income 3,761,538 1,100,906
Interest expense (39,876) (53,016)
------------------- --------------------
Total other income, net 3,721,662 1,047,890
------------------- --------------------
Income (loss) before provision for income taxes 5,160,270 9,721,103
Provision for income taxes 100,000 227,000
------------------- --------------------
Net income (loss) 5,060,270 9,494,103
Earnings (loss) per share:
Primary $ 0.33 $ 0.82
=================== ====================
Fully diluted $ 0.33 $ 0.79
=================== ====================
Shares used in calculation of
earnings (loss) per share:
Primary 15,466,000 11,600,000
=================== ====================
Fully diluted 15,466,000 12,056,000
=================== ====================
See accompanying notes to financial statements.
3
Neurogen Corporation
Statements of Cash Flows
Nine Months Nine Months
Ended Sept. 30, Ended Sept. 30,
1996 1995
(Unaudited) (Unaudited)
------------------- ----------------
Cash flows from operating activities:
Net income $ 5,060,270 $ 9,494,103
Adjustments to reconcile net income
to net cash provided by (used in) operating
activities:
Depreciation and amortization expense 677,213 547,615
(Gain) loss on sale of assets (15,562) 3,053
Changes in operating assets and liabilities:
Increase (decrease) in accounts payable and accrued expenses (448,996) 760,561
Increase (decrease) in unearned revenue from corporate partner (55,333) 4,494,667
(Increase) decrease in other current assets 667,127 (301,322)
Increase in receivable from corporate partners (1,868,865) -
(Increase) decrease in other assets, net 83,991 (185,795)
------------------- ----------------
Net cash provided by operating activities 4,099,845 14,812,882
Cash flows from investing activities:
Purchase of plant and equipment (3,204,251) (1,157,576)
Purchases of marketable securities (26,759,041) (16,647,511)
Maturities and sales of marketable securities 51,537,847 16,402,180
Proceeds from sale of asset 108,912 -
------------------- ----------------
Net cash provided by (used in) investing activities 21,683,467 (1,402,907)
Cash flows from financing activities:
Exercise of employee stock options 1,580,756 354,677
Proceeds from sale of common stock, net - 42,888,595
Principal payments under mortgage payable (117,977) (104,182)
Principal payments under capital lease obligations - (30,858)
------------------- ----------------
Net cash provided by financing activities 1,462,779 43,108,232
------------------- ----------------
Net increase in cash and cash equivalents 27,246,091 56,518,207
Cash and cash equivalents at beginning of period 26,004,548 9,439,727
------------------- ----------------
Cash and cash equivalents at end of period $ 53,250,639 $65,957,934
=================== ================
See accompanying notes to financial statements.
4
Neurogen Corporation
Notes to Financial Statements
September 30, 1996
(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. Interim
results are not necessarily indicative of the results that may be expected
for the fiscal year.
(2) Marketable Securities
---------------------
Marketable securities consist principally of debt securities with
maturities of three months to five years and have been classified as
available for sale securities. Management considers these investments,
which represent funds available for current operations, an integral
component of its cash management activities. Accordingly, marketable
securities have been classified as current assets in the September 30, 1996
balance sheet.
(3) Adoption of New Accounting Pronouncements
-----------------------------------------
The Company has adopted Statement of Financial Accounting Standards No. 121
("SFAS 121"), "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of". SFAS 121 requires impairment losses
to be recorded on the long-lived assets used in operations when indicators
of impairment are present and the undiscounted cash flows estimated to be
generated by those assets are less than the assets' carrying amount. SFAS
121 also addresses the accounting for any expected disposal of long-lived
assets. The adoption of SFAS 121 had no impact on the financial position or
results of operations of the Company as no indicators of impairment
currently exist.
The Company has adopted the disclosure provisions of Financial Accounting
Standards No. 123 ("SFAS 123"), Accounting and Disclosure of Stock-Based
Compensation. The Company will continue to account for its stock-based
compensation arrangements under the provisions of APB 25, Accounting for
Stock Issued to Employees.
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, excluding the effect of license fees
received from Schering-Plough Corporation ("Schering-Plough") in 1995 and
1996 and Pfizer Inc ("Pfizer") in 1995, expects to incur significant losses
in most years prior to deriving any product revenues. Its revenues to date
have come from three collaborative research agreements entered into with
Pfizer, one collaboration with Schering-Plough, and from interest 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, joint ventures or financings, if any, the
progress of the Company's research and development 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 expected to
increase for the foreseeable future.
THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
The Company's operating revenues increased to $3.5 million for the
three months ended September 30, 1996 from $2.6 million for the same period
in 1995. This increase is due to a $0.9 million increase in research and
development revenues attributable to the commencement of research funding
under the Schering-Plough Agreement and the 1995 Pfizer Agreement (as
defined below). Research and development revenues include amounts received
from Pfizer and Schering-Plough, under separate collaborations, to fund
Neurogen's collaborative research programs and, in the case of its NPY-
obesity collaboration with Pfizer, to reimburse Neurogen for certain
expenses for the clinical development of the Company's lead anti-obesity
drug NGD 95-1.
Research and development costs of $3.6 million were essentially
unchanged for the three-month period ended September 30, 1996 as compared
to the same period in 1995. Comparing these periods, an increase in the
size of the Company's research staff and related laboratory costs was
generally offset by a decrease in clinical development costs, which
fluctuate significantly from quarter to quarter. Research and development
costs represented 81 percent of total operating expenses for the third
quarter of 1996 as compared to 85 percent for the same period in 1995.
General and administrative expenses increased 32 percent to $0.9
million for the three-month period ended September 30, 1996 as compared to
the same period in 1995. This increase is due to an increased
level of administrative expenses necessary to support a growing research
staff.
Other income consisting primarily of interest income, and gains and
losses from invested cash and marketable securities increased to $1.3
million for the third quarter of 1996 from $0.6 million for the same period
in 1995 due primarily to a higher level of invested funds.
The Company recognized net income of $0.3 million for the three months
ended September 30, 1996 as compared with a net loss of $1.0 million for
the same period in 1995. The change in earnings is primarily due to the
increase in interest income due to the higher level of invested funds and
the increase in research revenues, all as noted above.
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
The Company's operating revenues decreased to $13.7 million for the
nine months ended September 30, 1996 from $20.4 million for the same period
in 1995. The Company's 1995 results for the nine months ended September 30,
1995 include license revenue of $14.0 million received from Schering-Plough
in 1995 in connection with entering into the Schering-Plough Agreement.
Results for the nine months ended September 30, 1996 include the
recognition of a previously unearned license fee of $3.0 million received
from Schering-Plough in July 1995 for access to a portion of Neurogen's
combinatorial chemistry libraries. Research and development revenues
increased $4.3 million, or 68 percent, to $10.7 million due to the
commencement of research funding under the Schering-Plough Agreement and
the 1995 Pfizer Agreement. In addition to the quarterly research funding
payments received from Pfizer, research and development revenue for the
nine months ended September 30, 1996 includes reimbursements from Pfizer of
certain development expenses as part of the cost sharing arrangement on the
NPY obesity project.
Research and development costs increased 5 percent to $10.0 million for
the nine-month period ended September 30, 1996 as compared to the same
period in 1995. The increase is due to increases in research staff,
laboratory supplies and increases in external clinical and development work
on the Company's lead compound for eating disorders, NGD 95-1. Research and
development costs represented 82 percent of total operating expenses in
each of the nine month periods ended September 30, 1996 and 1995.
General and administrative expenses increased 4 percent to $2.3 million
for the nine months ended September 30, 1996 as compared to the same period
in 1995, due to an increased level of administrative expenses necessary to
support a growing research staff.
Other income, consisting primarily of interest income, and gains and
losses from invested cash and marketable securities, increased to $3.7
million for the nine months ended September 30, 1996 from $1.0 million for
the same period in 1995 due primarily to a higher level of invested funds.
The Company recognized net income of $5.1 million for the nine months
ended September 30, 1996 as compared with net income of $9.5 million for
the same period in 1995. The change in earnings is primarily due to the
recognition of nonrecurring license fees of $14.0 million in 1995 and $3.0
million in 1996 and the increase in research and development revenues, all
as noted above.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1996 and December 31, 1995, cash, cash equivalents and
marketable securities were in the aggregate $93.9 million and $91.6 million
respectively. While the Company's aggregate level of cash, cash
equivalents and marketable securities did not change significantly during
the first nine months of 1996, 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, nonequity amounts received pursuant to
collaborative arrangements and interest earned on invested funds. The
Company's financing activities include three private placement offerings of
its common stock prior to its initial public offering, underwritten public
offerings of the Company's common stock in 1989, 1991 and 1995, and three
private sales of common stock to Pfizer in connection with entering into
the Pfizer Agreements. Total funding received from these equity financing
activities was approximately $104.9 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 facility.
In the first quarter of 1992, the Company and Pfizer entered into a
collaborative agreement to develop drugs which modulate the
neurotransmitter gama-aminobutyric acid, or GABA, to treat anxiety
disorders and cognition impairment (the "1992 Pfizer Agreement") pursuant
to which Pfizer made a $13.8 million equity investment in the Company.
Under this agreement, the Company has received or is scheduled to receive
$4.6 million in each year from 1992 through 1996 to fund Neurogen's
research in its anxiolytic (anxiety-reducing drugs) and cognitive enhancer
programs. Neurogen could also receive milestone payments of up to $12.5
million during the development and regulatory approval of products from
these programs. In return, Pfizer received the exclusive rights to
manufacture and market collaboration products and for which it will pay
Neurogen royalties based upon net sales levels, if any, for such products.
As of September 30, 1996, Pfizer had provided $21.9 million of research
funding to the Company pursuant to the 1992 Pfizer Agreement, in addition
to its $13.8 million equity investment in 1992.
Neurogen and Pfizer entered into their second collaborative agreement
(the "1994 Pfizer Agreement") in July 1994. Under this agreement, Pfizer
made an additional $9.9 million equity investment in the Company.
Additionally, the Company has received or is scheduled to receive
approximately $7.4 million during the three-year period which commenced
July 1, 1994, to fund Neurogen's sleep disorder program and may receive up
to an additional $2.4 million for a fourth year should
Pfizer exercise its option to extend the research program under the
collaboration. Neurogen could also receive milestone payments of up to $3.3
million during the development and regulatory approval of its sleep
disorder compounds. As part of this second collaboration, Pfizer received
the exclusive rights to manufacture and market collaboration products for
which it will pay Neurogen royalties depending upon net sales levels, if
any. As of September 30, 1996, Pfizer had provided $6.2 million of research
funding to the Company pursuant to the 1994 Pfizer Agreement (including
$0.6 million of unearned revenue), in addition to its $9.9 million equity
investment in 1994.
Under both the 1992 Pfizer Agreement and the 1994 Pfizer Agreement, in
addition to making the equity investments and the research and milestone
payments noted above, Pfizer is responsible for funding the cost of all
clinical development and the manufacturing and marketing, if any, of drugs
developed from the collaborations.
Neurogen and Pfizer entered into their third collaborative agreement
(the "1995 Pfizer Agreement") in November 1995 to develop drugs which
modulate the neurotransmitter neuropeptide Y (NPY) to treat disorders,
including obesity. Under this Agreement, Pfizer made an additional $16.5
million equity investment in the Company and paid a $3.5 million license
fee. The Company has received or is scheduled to receive approximately $7.2
million during the three-year period which commenced November 1, 1995, to
fund Neurogen's NPY program and may receive up to an additional $2.4
million per year for a fourth and fifth year should Pfizer exercise its
option to extend the research program under the collaboration. Neurogen
could also receive milestone payments of up to approximately $28 million
during the development and regulatory approval of collaboration products.
As of September 30, 1996, Pfizer had provided $1.8 million in research
funding pursuant to the 1995 Pfizer Agreement. As part of this third
collaboration, Pfizer received the exclusive worldwide rights to
manufacture and market NPY-based collaboration compounds, subject to
certain rights retained by Neurogen. In this collaboration, Neurogen will
fund a minority share of early stage NAFTA clinical development costs.
Neurogen has retained the right to manufacture any collaboration products
in NAFTA countries and has retained a profit sharing option with respect to
product sales in NAFTA countries. If Neurogen exercises the profit sharing
option, it will fund a minority share of the cost of late stage NAFTA
clinical development and NAFTA marketing costs and in return receive a
specified percentage of any profit generated by sales of collaboration
products in NAFTA countries. If Neurogen chooses not to exercise its
profit-sharing option, Pfizer would pay Neurogen royalties on drugs
marketed in NAFTA countries and would fund a majority of early stage and
all late stage development and marketing expenses. In either case Neurogen
would be entitled to royalties on drugs marketed in non-NAFTA countries.
In June 1995, Neurogen and Schering-Plough entered into an agreement
(the "Schering-Plough Agreement") to collaborate in the discovery and
development of drugs for the treatment of schizophrenia and other disorders
which act through the dopamine family of receptors. Pursuant to the
Schering-Plough Agreement, the Company received one-time license fees of
$14.0 million for rights relating to Neurogen's
dopamine program and $3.0 million for the right to test certain of
Neurogen's combinatorial chemistry libraries in selected non-CNS assays.
Schering-Plough funded an additional $3.0 million in 1996 for the right to
test additional libraries which is included in unearned revenue at
September 30, 1996. Neurogen expects to receive approximately $7.2 million
during the two-year period which commenced June 28, 1995, for research and
development funding of the Company's dopamine program. The Company may
receive additional research and development funding of up to $3.6 million
per year for three additional one-year periods depending on whether and the
extent to which Schering-Plough exercises its right to extend the research
program under the collaboration. Neurogen could also receive milestone
payments of up to approximately $32 million if certain development and
regulatory objectives are achieved regarding its products subject to the
collaboration. In return, Schering-Plough received the exclusive worldwide
license to market products subject to the collaboration and Neurogen
retained the rights to receive royalties based on net sales levels, if any,
and an option to manufacture products for the United States market. As of
September 30, 1996, Schering-Plough had provided $5.0 million in research
funding (including $450,000 in unearned revenue) pursuant to the Schering-
Plough Agreement. In addition to the payments described above, Schering-
Plough is responsible for funding the cost of all clinical development and
marketing, if any, of drugs subject to the collaboration.
The Company plans to use its cash balance 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 the Pfizer Agreements and the Schering-Plough
Agreement, will be sufficient to fund its current and planned operations
through 1999. 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. 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 arrangements have been
entered into for any future financing and no assurances can be given that
adequate levels of additional funding can be obtained on favorable terms,
if at all.
As of December 31, 1995, the Company had approximately $12,240,000 of
net operating loss carryforwards available for federal income tax purposes
which expire from the years 2003 through 2009. The Company had
approximately $10,670,000 of Connecticut state tax net operating loss
carryforwards as of December 31, 1995 which expire in the years 1996
through 1999. Because of "change in ownership" provisions of the Tax
Reform Act of 1986, the Company's utilization of its net operating loss
carryforwards may be subject to an annual limitation in future periods.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not applicable for the third quarter ended September 30, 1996.
ITEM 2. CHANGES IN SECURITIES
Not applicable for the third quarter ended September 30, 1996.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable for the third quarter ended September 30, 1996.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable for the third quarter ended September 30, 1996.
ITEM 5. OTHER INFORMATION
Not applicable for the third quarter ended September 30, 1996.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) See Exhibit Index on page 11.
(b) None.
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, 1995,
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
Vice President-Finance and
Chief Financial Officer
Date: November 7, 1996
Exhibit Index
-------------
Exhibit
-------
Number
------
3.1 - Restated Certificate of Incorporation, filed June 17, 1994.
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 - Open-End Mortgage Deed and Security Agreement between the
Company and Orion Machinery & Engineering Corp., dated March
16, 1989 (incorporated by reference to Exhibit 10.15 to
Registration Statement No. 33-29709 on Form S-1).
10.10 - Form of Proprietary Information and Inventions Agreement
(incorporated by reference to Exhibit 10.31 to Registration
Statement No. 33-29709 on Form S-1).
10.11 - Warrant to Purchase 47,058 Shares of Common Stock to MMC/GATX
Partnership No. I, dated February 20, 1991 (incorporated by
reference to Exhibit 10.34 to the Company's Form 10-K for the
fiscal year ended December 31, 1990).
10.12 - 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).
10.13 - License Agreement between the Company and the National Technical
Information Service, dated as of January 1, 1992 (incorporated by
reference to Exhibit 10.36 to the Company's Form 10-K for the
fiscal year ended December 31, 1991).
10.14 - Cooperative Research and Development Agreement between the
Company and the National Institutes of Health, dated as of
January 21, 1993 (incorporated by reference to Exhibit 10.37 to
the Company's Form 10-K for the fiscal year ended December 31,
1991).
10.15 - 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).
10.16 - 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).
10.17 - 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).
10.18 - 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).
10.19 - Registration Rights and Standstill Agreement among the Company
and the Persons and Entities listed on Schedule I thereto, dated
as of July 11, 1994 (incorporated by reference to Exhibit 10.29
to the Company's Form 10-Q for the quarterly period ended
September 30, 1994).
10.20 - 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).
10.21 - 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).
10.22 - 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).
10.23 - 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).
10.24 - 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).
10.25 - Underwriting Agreement dated August 17, 1995 between the Company
and Smith Barney Inc., Robertson, Stephens & Company and Pacific
Growth Equities, Inc. incorporated by reference to the Company's
Registration Statement on Form S-3 (File No. 33-60929).
11.1 - Computation of Earnings per Common Share.
27.1 - Financial Data Schedule