===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
- --------------------------------------------------------------------------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF
THE SECURITIES EXCHANGE ACT OF 1934
- --------------------------------------------------------------------------------
For the quarterly period ended September 30, 1996
Commission File Number 0-19874
- --------------------------------------------------------------------------------
Neurex Corporation
(Exact name of registrant as specified in its charter)
DELAWARE 77-0128552
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3760 Haven Avenue, Menlo Park, California 94025-1012
(Address of principal executive offices)
(415) 853-1500
(Registrant's telephone number, including area code)
- --------------------------------------------------------------------------------
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
Common Stock, $ .01 par value NASDAQ National Market System
Securities registered pursuant to Section 12(g) of the Act:
None
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 _____
The number of shares of Common Stock outstanding at October 15, 1996
was 22,028,264 shares.
This report on Form 10-Q contains 13 pages.
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NEUREX CORPORATION
INDEX
Page
Item Part I. Financial Information Number
-------
-------
1. Financial Statements (unaudited):
a. Consolidated Balance Sheets - September 30, 1996 and
December 31, 1995.................. 3
b. Consolidated Statements of Operations - Three and Nine Months Ended
September 30, 1996 and 1995........ 4
c. Condensed Consolidated Statements of Cash Flows - Nine Months Ended
September 30, 1996 and 1995................................... 5
d. Notes to Condensed Consolidated Financial Statements......... 6-7
2. Management's Discussion and Analysis of Financial Condition and
Results of Operations................................... ............ 8-10
Part II. Other Information
1. Legal Proceedings.................................. ............. 11
2. Changes in Securities......................... ................ 11
3. Defaults Upon Senior Securities................................ 11
4. Submission of Matters to a Vote of Security Holders............. 11
5. Other Information............................................... 11
6. Exhibits and Reports on Form 8-K............................... 11
Signatures................................... ................. 12
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
NEUREX CORPORATION
CONSOLIDATED BALANCE SHEETS
(unaudited)
<TABLE>
ASSETS
<CAPTION>
September 30, December 31,
1996 1995
----------------- -----------------
----------------- -----------------
Current assets:
<S> <C> <C>
Cash and cash equivalents............................................... $ 33,461,274 $ 2,655,116
Short-term investments.................................................. 54,503,653 22,055,837
Receivables............................................................. 59,895 16,044
Receivable - related party ............................................. -- 494,654
Prepaid expenses and other.............................................. 320,797 206,610
----------------- -----------------
----------------- -----------------
Total current assets.................................................. 88,345,619 25,428,261
Property and equipment, net................................................ 1,771,800 1,629,010
Notes receivable from officers............................................. 293,475 112,928
Long-term investments...................................................... 3,024,595 --
Other assets, net.......................................................... 123,371 142,050
----------------- -----------------
$ 93,558,860 $ 27,312,249
================= =================
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
<S> <C> <C>
Accounts payable ....................................................... $ 880,322 $ 346,491
Accrued wages and benefits.............................................. 493,985 160,475
Accrued payables to related parties..................................... 146,558 85,891
Accrued clinical and preclinical testing................................ 1,673,134 951,942
Other accrued liabilities............................................... 613,073 522,559
Deferred revenue - related parties ..................................... 1,523,346 2,242,000
Notes payable to stockholder............................................ -- 288,513
Current portion of capital lease obligations............................ 232,748 194,879
----------------- -----------------
Total current liabilities............................................. 5,563,166 4,792,750
Long-term capital lease obligations........................................ 334,039 516,800
Prepaid milestone repayable to Medtronic, Inc., a stockholder ............. 1,619,067 1,468,228
<CAPTION>
Stockholders' equity:
<S> <C> <C>
Convertible preferred stock, $ .01 par value; authorized: 15,000,000
shares; none outstanding................................................... -- --
Common stock, $ .01 par value; authorized: 45,000,000 shares; issued and
outstanding: 22,028,264 shares at September 30, 1996 and 18,209,097
shares at December 31, 1995 ........................................, 220,283 182,091
Additional paid-in capital.............................................. 155,577,116 79,909,713
Deferred compensation................................................... (91,808) (219,739)
Unrealized gain (loss) on investments .................................. 9,881 (2,684)
Accumulated deficit..................................................... (69,672,884) (59,334,910)
----------------- -----------------
Total stockholders' equity.............................................. 86,042,588 20,534,471
----------------- -----------------
================= =================
$ 93,558,860 $ 27,312,249
================= =================
</TABLE>
See accompanying notes.
<PAGE>
NEUREX CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
Three Months Ended Nine Months Ended
September 30, . September 30,
------------ ------------
1996 1995 1996 1995
------------ ------------ ------------ ------------
<CAPTION>
Revenues from collaborative agreements and grants:
<S> <C> <C> <C> <C>
Related parties ......................................... $ 39,474 1,131,978 $ 841,004
Other ................................................... $ 1,639,928 $ 26,307 1,645,630 1,747,065
------------ ------------ ------------ ------------
1,679,402 26,307 2,777,608 2,588,069
<CAPTION>
Costs and expenses:
<S> <C> <C> <C> <C>
Research and development ................................ 4,949,199 2,355,716 12,892,396 8,207,478
General and administrative .............................. 1,163,751 570,958 2,588,258 1,538,478
------------ ------------ ------------ ------------
Total costs and expenses .............................. 6,112,950 2,926,674 15,480,654 9,745,956
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Loss from operations ....................................... (4,433,548) (2,900,367) (12,703,046) (7,157,887)
Interest income ............................................ 1,335,497 141,877 2,517,945 208,400
Interest expense ........................................... (56,395) (224,273) (152,873) (251,762)
------------ ------------ ------------
------------ ------------ ------------ ------------
Net loss ................................................... $(3,154,446) $(2,982,763) $(10,337,974) $ (7,201,249)
============ ============ ============ ============
Net loss per share ......................................... (0.14) (0.23) (O.51) (0.57)
============ ============ ============ ============
Shares used in net loss per share
computation ............................................. 22,012,558 13,065,326 20,229,857 12,564,690
</TABLE>
See accompanying notes.
<PAGE>
NEUREX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Increase (decrease) in cash and cash equivalents
(unaudited)
<TABLE>
Nine Months Ended
September 30,
--------------------------------------
1996 1995
------------------ -------------------
<CAPTION>
Cash flows used for operating activities:
<S> <C> <C>
Net loss....................................................... $ (10,337,974) $ (7,201,249)
<CAPTION>
Adjustments to reconcile net loss to net cash used
for operating activities:
<S> <C> <C>
Depreciation and amortization............................ 306,859 253,377
Noncash expenses from stock, debt and warrant issuance's 260,120 288,709
<CAPTION>
Changes in assets and liabilities:
<S> <C> <C>
Note receivables from officers........................... (180,547) (9,225)
Receivables.............................................. (43,851) 98,600
Receivables - Related Party.............................. 494,654 (2,510,377)
Prepaid expenses and other............................... (155,185) 228,108
Accounts payable......................................... 533,831 (187,030)
Accrued and other liabilities............................ 1,205,882 208,729
Deferred revenue......................................... (718,654) 1,920,950
------------------ -------------------
------------------ -------------------
Net cash used for operating activities................... (8,593,865) (6,909,407)
<CAPTION>
Cash flows from investing activities:
<S> <C> <C>
Purchase of property and equipment............................. (433,335) (253,244)
Purchases of short-term investments............................ (165,644,237) (918,027)
Maturities of short-term investments .......................... 79,758,421 2,699,826
Sales of short-term investments................................ 50,425,970 3,493,999
Payment of notes payable to stockholder ....................... (288,513) --
------------------ -------------------
Net cash provided by (used for) investing activities..... (36,181,694) 5,022,554
<CAPTION>
Cash flows from financing activities:
<S> <C> <C>
Sales of common stock.......................................... 75,724,244 3,541,894
Payments of capital lease obligations.......................... (144,892) (119,023)
Proceeds from capital lease obligations ....................... -- 320,871
Proceeds from the issuance of convertible debt................. -- 8,000,000
Other assets .................................................. 2,365 (140,755)
------------------ -------------------
------------------ -------------------
Net cash provided by financing activities................ 75,581,717 11,602,987
------------------ -------------------
------------------ -------------------
Net increase in cash and cash equivalents ........................ 30,806,158 9,716,134
Cash and cash equivalents at beginning of period.................. 2,655,116 78,253
------------------ -------------------
================== ===================
Cash and cash equivalents at end of period........................ $ 33,461,274 $ 9,794,387
================== ===================
<CAPTION>
Supplemental disclosures of noncash financing activities:
<S> <C> <C>
Conversion of debt to common stock............................. $ $
-- --
================== ===================
================== ===================
Supplemental disclosures of cash flow information:
Cash paid for interest......................................... $ 36,000 $ 75,000
================== ===================
</TABLE>
See accompanying notes.
<PAGE>
NEUREX CORPORATION
NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
1. Summary of significant accounting policies
Organization
Neurex was incorporated in Delaware on October 15, 1986 to develop
products for the treatment of diseases based upon advances in neuroscience
technology and other therapeutic areas with unmet medical needs.
Change in Year End
In July 1996, the Company changed its fiscal year end from September 30
to December 31, effective with the 12 months ended December 31, 1996. On August
23, 1996 the Company filed a transistion report on Form 10-Q for the quarter
ended December 31, 1995.
Principles of consolidation
The consolidated financial statements include the accounts of Neurex
and its wholly-owned subsidiary. All significant intercompany accounts and
transactions have been eliminated.
Interim financial statements
The information at September 30, 1996, and for the three and nine month
periods ended September 30, 1996 and December 31, 1995 is unaudited, but in the
Company's opinion, the accompanying condensed interim financial statements
include all adjustments, consisting only of normal recurring adjustments, which
the Company considers necessary to fairly state the Company's financial position
and the results of operations and cash flows. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted.
The accompanying condensed financial statements should be read in conjunction
with the financial statements and notes thereto included in the Company's Annual
Report on Form 10-K for the year ended September 30, 1995. The results of the
Company's operations for any interim period are not necessarily indicative of
the results of the Company's operations for any other interim period or for a
full fiscal year.
Securities held-to-maturity and available-for-sale
Management determines the appropriate classification of debt securities
at the time of purchase and reevaluates such designation as of each balance
sheet date. Debt securities are classified as held-to-maturity when the Company
has the positive intent and ability to hold the securities to maturity.
Debt securities not classified as held-to-maturity are classified as
available-for-sale. Available-for-sale securities are carried at fair value,
with the unrealized gains and losses reported in a separate component of
stockholders' equity. The cost of debt securities in this category is adjusted
for amortization of premiums and accretion of discounts to maturity. Such
amortization and accretion is included in interest income and expense. Realized
gains and losses and declines in value judged to be other-than-temporary on
available-for-sale securities are included in interest income or expense. The
cost of securities sold is based on the specific identification method. Interest
and dividends on securities classified as available-for-sale are included in
interest income.
<PAGE>
Net loss per share
Net loss per share is computed using the weighted average number of
shares of common stock outstanding. Common equivalent shares from stock options
and warrants are excluded from the computation as their effect is antidilutive.
2. Available-for-Sale Securities
The Company has classified as available-for-sale its entire investment
portfolio, which consists primarily of U.S. Treasury Notes and other U.S.
government securities of $29,787,865 and corporate debt securities of
$58,759,675 at September 30, 1996. At September 30, 1996, securities had
contractual maturities of one year or less. The gross realized gains and losses
on sales of available-for-sale securities were insignificant in the nine months
ended September 30, 1996 and 1995.
3. Stockholders' Equity
On October 16, 1995, the Company completed the sale of 3,000,000 shares
of common stock at $4.50 per share in a directed public offering. The offering
triggered the conversion of $6,500,000 of the convertible note payable to
Medtronic, Inc., plus related interest of $190,576 through October 16, 1995,
into common stock at a conversion price of $4.625 per share and the transfer of
approximately $320,000 of the unamortized discount on the note to additional
paid-in capital on the note conversion. The remaining $1,500,000 of the note
converted into a prepaid milestone fee, which, if not earned by April 30, 1998,
will be repaid with interest. Further on the note conversion, Neurex issued to
Medtronic, Inc. a warrant to purchase 500,000 shares of common stock at $5.40
per share, exercisable through October 16, 2001. The offering triggered the
obligation of Warner-Lambert to purchase $3,000,000 of additional equity in the
Company. The first purchase of $1,500,000 was made on November 13, 1995 for
333,334 shares. The second purchase of $1,500,000 was made on March 29, 1996 for
75,263 shares.
On May 6, 1996, the Company completed the sale of 3,000,000 shares of
common stock at $22.75 per share in a public offering. On May 16, 1996, the
underwriters exercised their right to purchase an additional 450,000 shares of
common stock at the public offering price.
On February 6, 1996, the stockholders approved an increase in the
number of shares which may be granted under the 1988 Employee and Consultant
Stock Option Plan to 3,311,111 from 2,561,111.
4. Extension to the 1993 Research and Development Collaboration Agreement
with Warner Lambert
In an amendment dated September 25, 1996, the Company and
Warner-Lambert extended the 1993 Research and development Collaboration
agreement for three additional years beginning September 30, 1996. The amendment
further provides for up to $2,500,000 in additional milestone payments to the
Company for the achievement of research milestones in the calcium channel
project. In addition, Warner-Lambert will pay the Company approximately
$1,200,000 per year for research support.
5. Subsequent Event
On November 11, 1996 , the Company entered into an agreement with
Beaufour Ipsen of Paris, France, whereby the Company granted an exclusive
license to market and sell CORLOPAM in Europe and Asia, excluding Japan. In
addition, the Company will also sublicense its registration approvals in
Belgium, the Netherlands and Italy to Beaufour Ipsen. In consideration for the
agreement, the Company may receive up to $7,500,000 in licensing fees and
milestone payments. Neurex retains manufacturing rights to CORLOPAM and will
realize additional revenues from product sales and royalty payments.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Overview
Since commencement of operations in October 1986, Neurex has devoted
substantially all of its resources to its research and development programs. The
Company has been unprofitable since inception and expects to incur significant
and increasing losses over at least the next several years. As of September 30,
1996, the Company's cumulative net loss was $69,672,884. The Company's principal
sources of working capital have been public and private equity financings,
convertible notes payable, proceeds from a collaborative research agreement with
Ono Pharmaceutical Co., Ltd. ("Ono"), milestone and expense reimbursement
payments from a collaborative research and development agreement with
Warner-Lambert, license fees from Grunenthal, interest income, lease financings,
and research grants. The Company has not generated any product revenues.
The Company's business is subject to significant risks, including but
not limited to the success of its research and development and fund raising
efforts, uncertainties associated with obtaining and enforcing patents important
to the Company's business and with the lengthy and expensive regulatory process,
and possible competition from other products. Even if the Company's products
appear promising at an early stage of development, they may not reach the market
for a number of reasons. Such reasons include, but are not limited to, the
possibilities that the potential products will be found ineffective during
clinical trials, fail to receive the necessary regulatory approvals, be
difficult to manufacture on a large scale, be uneconomical to market or be
precluded from commercialization by the proprietary rights of third parties.
Additional expenses, delays and losses of opportunities that may arise out of
these and other risks could have a material adverse impact on the Company's
financial condition, results of operations, and cash flows.
In July 1996, the Company changed its fiscal year end from September 30
to December 31, effective with the 12 months ended December 31, 1996.
Results of Operations
Three Months Ended September 30, 1996 and 1995
Revenues were $1,679,402 and $26,307 for the three months ended
September 30, 1996 and 1995, respectively. Revenues for the period ended
September 30, 1996 consisted primarily of a payment from Grunenthal of
$1,580,733 to sublicense the rights to market Pro-urokinase in Europe.
Research and Development expenses increased by $2,593,483 or 110%, to
$4,949,199 for the three months ended September 30, 1996 compared to $2,355,716
in the earlier period. The increase was due primarily to increased clinical
study expenses related to the Company's Phase III clinical studies for
CORLOPAM(R), Phase III clinical studies of SNX-111 for the prevention of pain in
cancer and AIDS patients and Phase II clinical studies of SNX-111 for the
prevention of brain damage following closed head trauma and coronary artery
bypass graft ("CABG") surgery. The Company expects research and development
expenses to increase significantly over the next several years.
General and administrative expenses increased $592,793 or 104%, to
$1,163,751 for the three months ended September 30, 1996 compared to $570,958 in
the earlier period primarily due to higher legal, other professional fees and
employment related expenses. The Company expects general and administrative
expenses to increase over the next several years.
Interest income increased to $1,335,497 for the three months ended
September 30, 1996 compared to $141,877 in the earlier period. The increase was
due to the increase in cash available for investments as the result of the
successful completion of public offerings in October 1995 and May 1996.
Interest expense decreased to $56,395 for the three months ended
September 30, 1996 compared to $224,273 in the earlier period. The decrease in
interest expense for the three months ended September 30, 1996, is primarily due
to lower debt balances as a result of the conversion of the Medtronic note
payable plus accrued interest payable into common stock in October 1995.
Nine Months Ended September 30, 1996 and 1995
Revenues were $2,777,608 and $2,588,069 for the nine months ended
September 30, 1996 and 1995, respectively. Revenues from related parties were
$1,131,978 and $828,299 for the respective periods and consisted primarily of
the recognition of prepaid milestones in the prior year period and collaborative
research and development funding in the current year period. Other revenue
consisted primarily of payments from Grunenthal for the right to sublicense
Pro-urokinase in Europe.
Research and Development expenses increased by $4,684,918 or 57.1%, to
$12,892,396 for the nine months ended September 30, 1996 compared to $8,207,478
in the earlier period. The increase was due primarily to increased clinical
study expenses related to the Company's Phase III programs for CORLOPAM(R),
Phase III clinical studies of SNX-111 for the prevention of pain in cancer and
AIDS patients, Phase II clinical studies of SNX-111 for the prevention of brain
damage following closed head trauma and higher employment related expenses. The
Company expects research and development expenses to increase significantly over
the next several years.
General and administrative expenses increased $1,049,780 or 68.2%, to
$2,588,258 for the nine months ended September 30, 1996 compared to $1,538,478
in the earlier period primarily due to higher legal and patent and business
development expenses, computer maintenance and system upgrade expenses and
employment related expenses. The Company expects general and administrative
expenses to increase over the next several years.
Interest income increased to $2,517,945 for the nine months ended
September 30, 1996 compared to $208,400 in the earlier period. The increase was
due to the increase in cash available for investments as the result of the
successful completion of the public offerings in October 1995 and May 1996.
Interest expense decreased to $152,873 for the nine months ended
September 30, 1996 compared to $251,762 in the earlier period due primarily to
the convertible note payable to Medtronic which was converted to equity in
October 1995.
Liquidity and Capital Resources
For the nine months ended September 30, 1996, cash expenditures for
operating activities and additions to capital equipment were $9,027,200. The
Company anticipates that these expenditures will increase significantly in
future periods.
In May 1996, the Company completed the sale of 3,450,000 shares
of common stock at $22.75 per share which raised approximately $74,000,000, net
of commissions.
On October 16, 1995, the Company completed the sale of 3,000,000 shares
of common stock at $4.50 per share in a directed public offering. The offering
triggered the conversion of $6,500,000 of the convertible note payable to
Medtronic, Inc., a stockholder, plus related interest of $190,576 through
October 16, 1995, into common stock at a conversion price of $4.625 per share
and the transfer of approximately $320,000 of the unamortized discount on the
note to additional paid-in capital on the note conversion. The remaining
$1,500,000 of the Medtronic Note converted into a prepaid milestone fee, which,
if not earned by April 30, 1998, will be repaid with interest. Further on the
note conversion, Neurex issued to Medtronic, Inc. a warrant to purchase 500,000
shares of common stock at $5.40 per share, exercisable through October 16, 2001.
The offering triggered the obligation of Warner-Lambert to purchase $3,000,000
of additional equity in the Company. The first purchase of $1,500,000 was made
on November 13, 1995 for 333,334 shares. The second purchase of $1,500,000 was
made on March 29, 1996 for 75,263 shares.
The Company had available cash, cash equivalents and short-term
investments of $90,989,522 at September 30, 1996. Cash in excess of immediate
requirements is invested according to the Company's investment policy, which
provides guidelines with regard to liquidity and return and, wherever possible,
seeks to minimize the potential effects of concentration and degrees of risk.
The Company expects to continue to incur substantial additional
operating losses from costs related to continuation and expansion of research
and development, including clinical studies and increased administrative
activities over at least the next several years. The Company anticipates that
its existing capital resources and interest earned thereon will enable it to
maintain its current and planned operations through at least mid 1999. However,
the Company's requirements may change depending on numerous factors, including,
but not limited to, the progress of the Company's research and development
programs, the results of clinical studies, the number and nature of the
indications the Company pursues in clinical studies, the timing of domestic and
foreign regulatory approvals, technological advances, determinations as to the
commercial potential of the Company's products and the status of competitive
products. In addition, expenditures will be dependent on the establishment of
collaborative relationships with other companies, the availability of financing
and other factors. The Company plans to continue to fund its short and long-term
operations using a combination of public and private equity and debt offerings,
and payments from the licensing, sublicensing and/or sales of its intellectual
property rights. If such funds are not obtained, the Company may need to delay
or curtail its research and development activities to a significant extent.
Additional Agreements
In an amendment dated September 25, 1996, the Company and
Warner-Lambert extended the 1993 Research and development Collaboration
agreement for three additional years beginning September 30, 1996. The amendment
further provides for up to $2,500,000 in additional milestone payments to the
Company for the achievement of research milestones in the calcium channel
project. In addition, Warner-Lambert will pay the Company approximately
$1,200,000 per year for research support.
On November 11, 1996 , the Company entered into an agreement with
Beaufour Ipsen of Paris, France, whereby the Company granted an exclusive
license to market and sell CORLOPAM in Europe and Asia, excluding Japan. In
addition, the Company will also sublicense its registration approvals in
Belgium, the Netherlands and Italy to Beaufour Ipsen. In consideration for the
agreement, the Company may receive up to $7,500,000 in licensing fees and
milestone payments. Neurex retains manufacturing rights to CORLOPAM and will
realize additional revenues from product sales and royalty payments.
<PAGE>
PART II - OTHER INFORMATION
NEUREX CORPORATION
1. LEGAL PROCEEDINGS
None.
2. CHANGES IN SECURITIES
None.
3. DEFAULTS UPON SENIOR SECURITIES
None.
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
5. OTHER INFORMATION
None.
6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
On July 26, 1996, the Company filed with the
Commission a current report on Form 8-K for the
purpose of reporting: (1) the retirement of its Chief
Financial Officer and Vice President, Finance,
Bradford M. Wait, and the appointment of his
replacement, John M. Ames; (2) the appointment by the
Company's Board of Directors of Robert Luther as a
new member of the Board; (3) the adoption by the
Company's Board of Directors of a form
indemnification Agreement and a voluntary Systematic
Stock Sales Program; and (4) the change in the
Company's fiscal year end from September 30 to
December 31.
On September 12, 1996, the Company filed with the
Commission a current report on Form 8-K for the
purpose of reporting; (1) amendments to the Company's
Systematic Stock Sales Program; and (2) the
appointment by the Company's Board of Directors of
Gerard N. Burrow, M.D. and Ray Egan as new members of
the Board.
<PAGE>
NEUREX CORPORATION
SIGNATURES
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.
Date: November 12, 1996 Neurex Corporation
----------------------------
By: /s/ Paul Goddard, Ph.D. By: /s/ John M. Ames
-------------------------- ------------------
Paul Goddard, Ph.D. John M. Ames
Chairman and Chief Executive Officer Vice President,
Finance and Chief
Financial Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
EXHIBIT 27
NEUREX CORPORATION FINANCIAL DATA SCHEDULE
ARTICLE 5
This schedule contains summary financial information extracted from
financial statements for the nine month period ending September 30, 1996 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000884065
<NAME> Neurex Corporation
<CURRENCY> US Dollars
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1.00
<CASH> 33,461,274
<SECURITIES> 54,503,653
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 88,345,619
<PP&E> 4,607,702
<DEPRECIATION> 2,835,902
<TOTAL-ASSETS> 93,558,860
<CURRENT-LIABILITIES> 5,563,166
<BONDS> 0
0
0
<COMMON> 220,283
<OTHER-SE> 85,882,305
<TOTAL-LIABILITY-AND-EQUITY> 93,558,860
<SALES> 0
<TOTAL-REVENUES> 2,777,608
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 15,480,654
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (2,365,072)
<INCOME-PRETAX> (10,337,974)
<INCOME-TAX> 0
<INCOME-CONTINUING> (10,337,974)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (10,337,974)
<EPS-PRIMARY> (0.51)
<EPS-DILUTED> (0.51)
</TABLE>
