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Print Edition StoriesWednesday, May 13, 2009
Neurogen cuts half its staff, plans possible sale
By Mass High Tech staff
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Neurogen Corp. has cut about half of its workforce and halted enrollment for its ongoing Phase 2 studies, in light of dismal news -- including a potential sale of the company or its assets -- from its first quarter results.
The Branford, Conn.-based drug developer announced in a press release that the company will cut more jobs as a way to “conserve capital” while planning the sale of assets or the company itself. The company suspended enrollment for studies of its Parkinson’s disease and Restless Legs Syndrome drug treatments.
The announcement follows an April report that the company’s auditing firm put an opinion in the annual report expressing concern over Neurogen’s survival.
Neurogen’s most recent round of troubles began last July, when it suspended the clinical trials of its anti-insomnia drug adipiplon, citing a “higher than anticipated rate of unwanted next-day effects.” In November, the company announced it was selling some of its non-core assets including research facilities and its chemical library, in deals that added up to $9 million. However, in December, Neurogen reported that the part of the deal to sell four of its five building was being terminated by the planned purchaser due to the “current state of the credit markets.” That pulled $6 million from its November deal.
The company also reported in March that it was abandoning the development of the drug adipiplon as a treatment for insomnia.
Neurogen (Nasdaq: NRGN) stock was trading at 19 cents on the Nasdaq Stock Market at the time of publication. The company reported a net loss of $34 million on total revenue of $3 million for 2008; In 2007, the company’s net loss came in at $55.7 million on total revenue of $15.4 million.
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