Neose Technologies Reports Second Quarter Financial Results and Provides Clinical Update

Neose Technologies Reports Second Quarter Financial Results and Provides Clinical Update

Neose Technologies, Inc. (NasdaqGM:NTEC) today announced financial results for the second quarter ended June 30, 2007. For the quarter ended June 30, 2007, the Company reported a net loss of $5.2 million, or $0.09 per basic and diluted share, compared to a net loss of $8.4 million, or $0.26 per basic and diluted share, for the second quarter in 2006. The decreased net loss for the 2007 period was primarily due to non-cash income of $1.9 million recorded due to a decrease in the fair value of the Company’s warrant liability, a $0.5 million increase in revenues, and a $0.5 million income tax benefit resulting from the sale of certain of the Company’s Pennsylvania research and development tax credits.

The Company reported revenues of $2.2 million for the second quarter of 2007, compared to $1.7 million for the second quarter of 2006. The increase in revenues during the 2007 period was due to higher revenues recognized under the Company’s collaborations with Novo Nordisk A/S and BioGeneriX AG. Research and development expenses increased to $7.7 million in the second quarter of 2007 from $7.1 million in the second quarter of 2006. The increase in research and development expenses during the 2007 period was primarily due to higher clinical and process development costs for NE-180, as well as higher costs associated with the Company’s collaborations with Novo Nordisk A/S and BioGeneriX AG.

General and administrative expenses were $2.5 million for the second quarter of 2007, compared to $3.1 million for the second quarter of 2006. The decrease in general and administrative expenses for the 2007 period was due to lower legal costs associated with our intellectual property, lower payroll expenses due to decreased headcount, and lower stock-based compensation.

For the six months ended June 30, 2007, the Company reported a net loss of $22.8 million, or $0.50 per basic and diluted share, compared to a net loss of $16.2 million, or $0.49 per basic and diluted share, for the same period in 2006. The increased net loss for the 2007 period was primarily due to non-cash expense of $4.4 million recorded due to an increase in the fair value of the Company’s warrant liability, and a $3.2 million increase in research and development expenses.

Operating expenses for the six months ended June 30, 2007 were $23.1 million, compared to $20.4 million for the same period in 2006. Research and development expenses for the six months ended June 30, 2007 increased to $17.6 million from $14.4 million in the comparable 2006 period. The increase in research and development expenses during the 2007 period was primarily due to higher clinical and process development costs for NE-180.

General and administrative expenses were $5.5 million for the six months ended June 30, 2007, compared to $6.0 million for the same period in 2006. The decrease for the 2007 period was primarily due to lower stock-based compensation and insurance costs.

The Company ended the second quarter of 2007 with $34.5 million in cash and cash equivalents.

The Company updated guidance with regard to cash availability and utilization. The Company stated that current cash would be sufficient to fund operations through the third quarter of 2008, as compared to its prior estimate of second quarter of 2008, based on its ability to defer certain clinical and process development activities planned in early 2008.