Neurogen announces financial results for the third quarter of 2009

Neurogen Corporation (NASDAQ: NRGN), a drug development company historically focused on drugs for psychiatric and neurological disorders, today announced financial and operating results for the quarter ended September 30, 2009. The Company also announced its analysis of results from a previously suspended Phase 2 study of aplindore in Restless Legs Syndrome (RLS) and that it has entered into an agreement to sell all real estate owned by the Company.

Stephen R. Davis, President and CEO said, "While we saw indications of efficacy in the RLS study of aplindore, our analysis of both efficacy and tolerability - when considered in the context of observations from similar clinical studies with drugs currently on the market - suggest the partial agonist profile of aplindore would not be differentiated from the full agonists which either are or will be generic by the time aplindore could be launched.”

Mr. Davis continued, “We are pleased to have recently entered into an agreement to sell our real estate at a price higher than we previously estimated and to have concluded the third quarter with financial results in line with our expectations.”

As previously announced, the Company has signed a merger agreement with Ligand Pharmaceuticals, Inc. (“Ligand”) pursuant to which the Company will become a wholly-owned subsidiary of Ligand. The Company expects the merger to close during the fourth quarter of 2009, subject to receipt of Company shareholder approval and the satisfaction of other customary closing conditions. In the merger, Company shareholders are entitled to receive shares of Ligand common stock with an aggregate market value of up to approximately $11.0 million, as adjusted for the Company’s net cash position shortly before the shareholder special meeting and subject to a share cap of 4,200,000 shares, which, if not waived by Ligand, would cause Company shareholders to receive less than $11.0 million in Ligand stock. Company shareholders also will receive four Contingent Value Rights (“CVRs”) in the merger under applicable CVR agreements, which would entitle Company shareholders to the net proceeds from the sale or licensing of certain Company assets, including its aplindore program and real estate holdings, and the achievement of a specified clinical milestone. The Company expects to send to Company shareholders a proxy statement/prospectus in connection with the merger in the near future, which will contain additional information regarding the merger.