Wednesday, December 3, 2008

Neurogen building buyers back out of $6M sale

By Marc Songini

The bad economy has nixed a $6 million dollar facilities sale for Branford, Conn.-based pharmaceuticals maker Neurogen Corp.

The financially troubled Neurogen had announced last month it was selling off four of its five buildings to an unnamed buyer to raise money. However, this week, Neurogen (Nasdaq: NRGN) disclosed the transaction was being terminated by the planned purchaser due to the “current state of the credit markets.” No other details were disclosed in its press release.

Despite this setback, the company still intends to sell off its “non-core assets.” Another separate but related deal to sell its chemical library for $3 million is expected to close by year’s end, Neurogen stated. The buyer is a global pharmaceuticals company, whose name Neurogen did not disclose.

The company clearly needs the cash. Last month, Neurogen reported that revenue in the third quarter of 2008 was zero. It lost $31.4 million in the third-quarter 2008, up from a loss of $7.89 million in the prior year. Revenue also dropped to zero, down from sales of $7.5 million in the third-quarter 2007.

Neurogen develops small molecule drugs to treat psychiatric and neurological disorders. Last month, it also reported it was abandoning the development of the drug adipiplon as a treatment for insomnia. Instead, the company will focus on the drug aplindore, which treats restless leg syndrome and Parkinson’s disease.

In 2007, the company reported a net loss of $55.7 million on revenue of $15.4 million.