Friday, November 14, 2008

Neurogen selling some buildings, IP for $9M

By Mass High Tech Staff

Neurological drug developer Neurogen Corp. is selling some of its non-core assets including research facilities and its chemical library, in deals that add up to $9 million.

Branford, Conn.-based Neurogen (Nasdaq: NRGN) says it has entered into an agreement to sell four of its five buildings to an unnamed buyer for $6 million, in a deal that is expected to close in the first quarter of 2009. The buildings have an outstanding mortgage loan on them, the balance of which was about $4.7 million at Sept. 30, 2008, company officials said.

In addition to the building sale, Neurogen has entered into a deal to sell its chemical library for $3 million to an unnamed global pharmaceutical company. Neurogen officials say that deal is expected to close in the fourth quarter of 2008.

Earlier this month, Neurogen reported that revenue in the September quarter dropped to zero and its net loss widened compared with the year-earlier quarter. Neurogen saw its loss deepen to $31.4 million in third-quarter 2008 from a loss of $7.89 million in third-quarter 2007. Revenue, meanwhile, dropped to zero compared with sales of $7.5 million in third-quarter 2007.

In addition to announcing its financial results, Neurogen also reported it was completely abandoning its development of the drug adipiplon as a treatment for insomnia following suspension of trials in July. Instead, the company will focus its efforts on advancing the drug aplindore to treat restless leg syndrome and Parkinson’s disease, officials said. Neurogen suspended the trial of adipiplon because of a “higher-than-anticipated rate of unwanted next-day effects.” Executives believe the unintended effects stem from the bilayer tabled formulation being used in the Phase 2/3 study.

In 2007, the company reported a net loss of $55.7 million on revenue of $15.4 million. In April, the company announced its plans to raise $30.6 million in a private placement and cut 45 workers to focus resources on clinical development.