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, 1998
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, 1998 the registrant had 14,413,710 shares of Common Stock
outstanding.
<PAGE>
NEUROGEN CORPORATION
INDEX
Page
Number
Part I - Financial Information
Item 1. Financial Statements............................................... 1
Balance Sheets at March 31, 1998 and
December 31, 1997................................................. 1,2
Statements of Operations for the three-month periods ended
March 31, 1998 and 1997 .......................................... 3
Statements of Cash Flows for the three-month periods ended
March 31, 1998 and 1997 .......................................... 4
Notes to Financial Statements...................................... 5
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations............................................. 6-11
Part II - Other Information
Item 1. Legal Proceedings................................................. 12
Item 2. Changes in Securities............................................. 12
Item 3. Defaults upon Senior Securities................................... 12
Item 4. Submission of Matters to a Vote of Security Holders............... 12
Item 5. Other Information................................................. 12
Item 6. Exhibits and Reports on Form 8-K.................................. 12
Signature ................................... ........................... 14
Exhibit Index ........................................................... 15-17
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
NEUROGEN CORPORATION
BALANCE SHEETS
(In thousands)
MARCH 31, 1998 DECEMBER 31, 1997
Assets (UNAUDITED) (AUDITED)
<S> <C> <C>
-------------- ---------------
Current assets:
Cash and cash equivalents $ 58,890 $ 66,924
Marketable securities 21,864 17,227
Receivables from corporate partners 784 1,192
Other current assets 1,058 1,122
------------- ---------------
Total current assets 82,596 86,465
Property, plant & equipment:
Land and land improvements 542 542
Building and building improvements 16,539 16,377
Leasehold improvements 4,026 4,026
Equipment 8,816 8,422
Furniture 506 484
--------------- ----------------
30,429 29,851
Less accumulated depreciation & amortization 5,508 4,950
--------------- ----------------
Net property, plant and equipment 24,921 24,901
Other assets, net 466 503
--------------- ----------------
$ 107,983 $ 111,869
=============== ================
</TABLE>
See accompanying notes to financial statements.
1
<PAGE>
<TABLE>
<CAPTION>
NEUROGEN CORPORATION
BALANCE SHEETS
(In thousands, except per share data)
MARCH 31, 1998 DECEMBER 31, 1997
(UNAUDITED) (AUDITED)
----------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Liabilities & Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $ 2,362 $ 4,418
Unearned revenue from corporate partners - 200
Current portion of mortgage payable 211 205
----------------- ------------------
Total current liabilities 2,573 4,823
Mortgage payable, excluding current portion 19 74
Other compensation 54 54
----------------- ------------------
Total liabilities 2,646 4,951
Commitments and Contingencies
Stockholders' Equity:
Preferred stock, par value $.025 per share
Authorized 20,000 shares; none issued - -
Common stock, par value $.025 per share
Authorized 30,000 shares; issued and outstanding
14,401 shares at March 31, 1998 and 14,390 shares
at December 31, 1997 360 360
Additional paid-in capital 110,477 110,231
Accumulated deficit (4,479) (2,776)
Deferred compensation (982) (894)
Unrealized loss on marketable securities (39) (3)
----------------- ------------------
Total stockholders' equity 105,337 106,918
----------------- ------------------
$ 107,983 $ 111,869
================= ==================
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
<TABLE>
<CAPTION>
NEUROGEN CORPORATION
STATEMENTS OF OPERATIONS
(In thousands, except per share data)
THREE MONTHS THREE MONTHS
ENDED ENDED
MARCH 31, 1998 MARCH 31, 1997
(UNAUDITED) (UNAUDITED)
---------------- ---------------
<S> <C> <C>
Operating revenues:
License fees $ - $ 3,000
Research and development 3,214 3,979
---------------- ---------------
Total operating revenues 3,214 6,979
Operating expenses:
Research and development 5,005 4,369
General and administrative 999 955
---------------- ----------------
Total operating expenses 6,004 5,324
---------------- ----------------
Operating income (loss) (2,790) 1,655
Other income (expense):
Investment income 1,093 1,241
Interest expense (6) (11)
---------------- ----------------
Total other income, net 1,087 1,230
---------------- ---------------
Income (loss) before provision for income taxes $ (1,703) $ 2,885
Provision for income taxes - 35
---------------- ----------------
Net income (loss) (1,703) 2,850
================ ================
Earnings (loss) per share:
Basic $ (0.12) $ 0.20
================ ================
Diluted $ (0.12) (1) $ 0.19
================ ================
Shares used in calculation of earnings (loss) per share:
Basic 14,392 14,282
================ ================
Diluted 14,392 (1) 15,366
================ ================
</TABLE>
See accompanying notes to financial statements.
(1) The common stock equivalents have not been included as their inclusion would
be anti-dilutive.
3
<PAGE>
<TABLE>
<CAPTION>
NEUROGEN CORPORATION
STATEMENTS OF CASH FLOWS
(In thousands)
THREE MONTHS THREE MONTHS
ENDED ENDED
MARCH 31, 1998 MARCH 31, 1997
(UNAUDITED) (UNAUDITED)
--------------- ---------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (1,703) $ 2,850
Adjustments to reconcile net income (loss) to net cash used in
operating activities:
Depreciation and amortization expense 696 394
Changes in operating assets and liabilities:
Decrease in accounts payable and accrued expenses (2,056) (1,093)
Decrease in unearned revenue from corporate partners (200) (2,405)
Decrease in other current assets 64 245
(Increase) decrease in receivable from corporate partners 408 (174)
Decrease in other assets, net 31 9
--------------- --------------
Net cash used in operating activities (2,760) (174)
Cash flows from investing activities:
Purchase of plant and equipment (578) (1,542)
Purchases of marketable securities (11,666) (10)
Maturities and sales of marketable securities 6,994 11,805
--------------- --------------
Net cash provided by (used in) investing activities (5,250) 10,253
Cash flows from financing activities:
Exercise of employee stock options 25 446
Principal payments under mortgage payable (49) (43)
--------------- --------------
Net cash provided by (used in) financing activities 24 403
--------------- --------------
Net increase (decrease) in cash and cash equivalents (8,034) 10,482
Cash and cash equivalents at beginning of period 66,924 62,823
--------------- --------------
Cash and cash equivalents at end of period $ 58,890 $ 73,305
=============== ==============
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
Neurogen Corporation
Notes to Financial Statements
March 31, 1998
(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) EARNINGS (LOSS) PER SHARE
Statement of Financial Accounting Standards No. 128, "Earnings per
Share", which became effective in 1997, requires presentation of two
calculations of earnings per common share. "Basic" earnings per common
share equals net income divided by weighted average common shares
outstanding during the period. "Diluted" earnings per common share
equals net income divided by the sum of weighted average common shares
outstanding during the period plus common stock equivalents.
Common stock equivalents are shares assumed to be issued if
outstanding stock options were exercised. The difference between the
shares used for the basic and dilutive calculation for the period
ended March 31, 1997 was the inclusion of 1,084,086 common equivalent
shares.
(3) ADOPTION OF NEW ACCOUNTING PRONOUNCEMENT
As of January 1, 1998, the Company adopted Statement 130, Reporting
Comprehensive Income. Statement 130 establishes new rules for the
reporting and display of comprehensive income and its components;
however, the adoption of this Statement had no material impact on the
Company's net income or shareholders' equity. Statement 130 requires
unrealized gains or losses on the Company's available-for-sale
securities, which prior to adoption were reported separately in
shareholders' equity to be included in other comprehensive income.
For the three month periods ended March 31, 1998 and 1997, total
comprehensive income (loss) was ($1,739,000) and $2,801,000,
respectively.
5
<PAGE>
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 one-time
license fees received in 1996 from Schering-Plough and American Home
Products and from Schering-Plough and Pfizer in 1995, expects to incur
significant losses in most years prior to deriving any such product
revenues. Revenues to date have come from three collaborative research
agreements entered into with Pfizer, one collaboration with
Schering-Plough, one license agreement with American Home Products 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 MARCH 31, 1998 AND 1997
The Company's operating revenues decreased to $3.2 million for
the three months ended March 31, 1998 as compared to $7.0 million for
the same period in 1997, which included a nonrecurring license fee of
$3.0 million. This decrease in operating revenues was due to the impact
of this nonrecurring license fee, together with a scheduled reduction
in research funding received, and a decrease in clinical expense
reimbursement, which are associated with the level of Neurogen clinical
expenses in its collaborative efforts with Pfizer to develop drugs for
the treatment of obesity. License fees in 1997 represented the
recognition of a previously unearned $3.0 million fee from
Schering-Plough for access to a portion of Neurogen's combinatorial
chemistry libraries. Research and development revenues decreased in
1998 due to a scheduled reduction in funding under the 1994 Pfizer
Agreement offset by increased revenues recognized from the December
1996 extension of the 1992 and 1994 Pfizer agreements as described
below, and in the case of Neurogen's NPY obesity collaboration
with Pfizer, a reduction in reimbursement of costs under a cost
sharing arrangement for certain expenses associated with human
clinical trials conducted by Neurogen. The amount of such
reimbursements may fluctuate significantly depending on the level of
clinical trials being conducted. The amount of scheduled research
funding may also fluctuate significantly depending on the extent to
which Pfizer or Shering-Plough elect to extend the research programs
under their respective collaborations.
6
<PAGE>
Research and development costs increased 15 percent to $5.0
million for the three-month period ended March 31, 1998 as compared to
the same period in 1997. The increase is primarily due to increases in
research and development personnel as well as the Company's further
expansion of its AIDD (Accelerated Intelligent Drug Design Program) for
the discovery of new drug candidates. Research and development
expenses represented 83 percent and 82 percent of total expenses in
1998 and 1997 respectively.
General and administrative expenses remained flat at $1.0
million for the three-month period ended March 31, 1998 as
compared to the same period in 1997.
Other income consisting primarily of interest income, and
gains and losses from invested cash and marketable securities decreased
12 percent for the first quarter of 1998 as compared to the same period
in 1997 due to a lower level of invested funds.
The Company recognized a net a loss of $1.7 million for the
three months ended March 31, 1998 as compared with a net income of $2.9
million for the same period in 1997. The decrease in earnings is
primarily due to a decrease in operating revenues, and an increase in
research and development expenses for the first quarter of 1998 due
to the factors described above.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1998 and December 31, 1997, cash, cash equivalents and
marketable securities were in the aggregate $80.8 million and $84.2
million respectively. While the Company's aggregate level of cash, cash
equivalents and marketable securities decreased slightly during the
first quarter of 1998, 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 financing activities, 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 the
private sale of common stock to Pfizer in connection with entering into
the Pfizer Agreements and to American Home Products in the American
Home Products Agreement. Total funding received from these financing
activities was approximately $105.6 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.
7
<PAGE>
In the first quarter of 1992, the Company entered into a
collaborative agreement (the "1992 Pfizer Agreement") pursuant to which
Pfizer made a $13.8 million equity investment in the Company. Under
this agreement, the Company received $4.6 million in each year from
1992 through 1996 and is receiving additional funding pursuant to a
December 1996 extension, as described below. Neurogen could also
receive milestone payments of up to $12.5 million if certain
development and regulatory objectives are achieved regarding its
products subject to the collaboration. In return, Pfizer received the
exclusive rights to manufacture and market collaboration anxiolytics
and cognition enhancers that act through the family of receptors which
interact with the neuro-transmitter gamma-aminobutyric acid, or GABA,
and for which it will pay Neurogen royalties based upon net sales
levels, if any, for such products. As of March 31, 1998, Pfizer had
provided $28.4 million of research funding to the Company pursuant to
the 1992 Pfizer Agreement and $0.3 million due to the completion of a
clinical development milestone, 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, pursuant to which
Pfizer made an additional $9.9 million equity investment in the
Company. Under this agreement, the Company received approximately $7.4
million during the three-year period which commenced July 1, 1994, to
fund Neurogen's sleep disorder program and is receiving additional
funding pursuant to a December 1996 extension, as described below.
Neurogen could also receive milestone payments of up to $3.3 million if
certain development and regulatory objectives are achieved regarding
its products subject to the collaboration. As part of this second
collaboration, Pfizer received the exclusive rights to manufacture and
market GABA-based sleep disorder products for which it will pay
Neurogen royalties depending upon net sales levels, if any. As of March
31, 1998, Pfizer had provided $9.1 of research funding to the Company
pursuant to the 1994 Pfizer Agreement, in addition to its $9.9 million
equity investment in 1994.
In December 1996, Neurogen and Pfizer extended the research
programs under the 1992 Pfizer Agreement and 1994 Pfizer Agreement
through 1998. Pursuant to the extension agreement, Neurogen has earned
$1.6 million in the first quarter of 1998 (which amount is included in
the above-described cumulative totals earned for the 1992 and 1994
agreements) and under the extension expects to receive an additional
$4.5 million during the remainder of 1998 for research and development
funding of the Company's GABA-based anxiolytic, cognitive enhancer
and sleep disorders projects.
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.
8
<PAGE>
Neurogen and Pfizer entered into their third collaborative
agreement (the "1995 Pfizer Agreement") in November 1995, pursuant to
which Pfizer made an additional $16.5 million equity investment in the
Company bringing Pfizer's ownership of the Company's common stock up to
approximately 21 percent and paid a $3.5 million license fee. The
Company is scheduled to receive approximately $2.4 million per year
during the three consecutive one year periods which commenced November
1, 1995, to fund Neurogen's neuropeptide Y (NPY) eating disorders
program. Pfizer has recently elected to extend this research program
for an additional one year period through October 1999 and to pay
Neurogen $2.4 million to fund such research. Neurogen may also receive
up to an additional $2.4 million for a 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 if certain development and regulatory
objectives are achieved regarding its products subject to the
collaboration. 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. Pursuant to the 1995 Pfizer Agreement, Neurogen will fund a
minority share of early stage development costs and 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 portion of the cost of late stage clinical trials and
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. As March 31, 1998,
Pfizer had provided $5.4 million in research funding pursuant to the
1995 Pfizer Agreement.
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 in each of 1995 and 1996
for the right to test certain of Neurogen's combinatorial chemistry
libraries in selected non-CNS assays. Neurogen received scheduled
funding aggregating 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. In March 1997,
Schering-Plough elected to extend the research program under the
Schering-Plough Agreement for an additional one-year period, through
June 1998, and to pay Neurogen $3.6 million to fund such research. The
Company may receive additional research and development funding of up
9
<PAGE>
to $3.6 million per year for two additional one-year periods depending
on whether and the extent to which Schering-Plough exercises its
right to further extend the research program under the collaboration.
Recently, Schering-Plough informed the Company that it had not yet
determined whether it wishes to extend the research program beyond June
1998. Neurogen expects to reach a decision with Schering-Plough within
the next few weeks. 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 March, 31 1998,
Schering-Plough had provided $9.9 million in research funding 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.
In the fourth quarter of 1996, Neurogen entered into an agreement,
the "American Home Products Agreement", acting through its Wyeth-Ayerst
Laboratories division. Under the terms of the agreement, Neurogen
received $0.8 million in license fees for ADCI, a small molecule
pharmaceutical that Neurogen has been developing for the treatment of
epilepsy and related disorders, and $0.8 million for 37,442 shares of
common stock. Neurogen may receive up to an additional $11.0 million in
the form of license fees, equity investment and milestone payments on
world-wide sales of ADCI.
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 2000. 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.
10
<PAGE>
As of December 31, 1997, the Company had approximately $13.6
million of net operating loss carryforwards available for federal
income tax purposes which expire from the years 2004 through 2012. The
Company had approximately $11.4 million of Connecticut state tax net
operating loss carryforwards as of December 31, 1997 which expire in
the years 1998 through 2002. 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.
The Company has conducted a review of its computer systems to
identify the systems that could be affected by the "Year 2000" issue
and is developing an implementation plan to resolve the issue. The
"Year 2000" problem is the result of computer programs being written
using two digits rather than four to define the applicable year. Any of
the Company's programs that have time-sensitive software may recognize
a date using "00" as the year 1900 rather than the year 2000. This
could result in system failures or miscalculations to existing software
and converting to new software. While the Company cannot accurately
predict any impact the "Year 2000" problem may have on third parties
with whom the Company conducts business, the Company believes that the
cost of making its information systems "2000 ready" will not be
material.
11
<PAGE>
Part II - Other Information
Item 1. Legal Proceedings
Not applicable for the first quarter ended March 31, 1998.
Item 2. Changes in Securities
Not applicable for the first quarter ended March 31, 1998.
Item 3. Defaults upon Senior Securities
Not applicable for the first quarter ended March 31, 1998.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable for the first quarter ended March 31, 1998.
Item 5. Other information
Not applicable for the first quarter March 31, 1998.
Item 6. Exhibits and Reports on Form 8-K
(a) See Exhibit Index on page 11.
(b) None
12
<PAGE>
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, 1997,
each of which could adversely affect the Company's business and the accuracy of
the forward-looking statements contained herein.
13
<PAGE>
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: May 15, 1998
14
<PAGE>
Exhibit Index
Exhibit
- -------
Number
- ------
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).
15
<PAGE>
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).
16
<PAGE>
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 - Licensing 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).
10.26 - 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).
27.1 - Financial Data Schedule
17
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0
0
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