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The Race for Space
$5 million CII loan to fuel Neurogen expansion
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Business New Haven
11/15/1999
By: Michael C. Bingham
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The Branford-based Neurogen Corp. has some new reasons to love Connecticut Innovations Inc. (CII), the state's risk-capital investment arm for high technology. About five million reasons, in fact.
CII announced November 10 that it had provided a $5 million loan to Neurogen to expand its pharmaceutical research facilities. The company has purchased a 54,000-square-foot former manufacturing facility adjacent to its current Northeast Industrial Road site, and is initially converting about one-third of it into laboratory space.
The $5 million loan is from the Bioscience Facilities Fund established last year by the state legislature to foster growth in the biosciences "cluster." CII is responsible for managing the $40 million fund and investing it in projects that create lab space.
Founded by Yale scientists in 1989, Neurogen designs and develops small-molecule drugs to treat an array of psychiatric, metabolic and inflammatory disorders. The company has formed drug-discovery partnerships with several large pharmaceutical firms. Earlier this year, Neurogen licensed its proprietary Accelerated Intelligent Drug Discovery (AIDD) system to its first partner, Pfizer Inc.
Though it has yet to bring any drug compounds to market (revenues for the first half of 1999 were just $5 million), the company has a market capitalization of more than $200 million.
Neurogen President and CEO Harry H. Penner Jr. said that the CII loan would enable renovations at the new facility to begin immediately. "The added space will help us to expand both our in-house drug-discovery projects and our external efforts to license our AIDD program to more pharmaceutical companies," Penner said. "We commend the state for having the foresight to set aside funds for this vital work, and we appreciate Connecticut Innovations ' recognition of the challenges our industry faces," he added.
Neurogen presently employs about 170 researchers and others.
The expansion made possible by the CII loan will create capacity to add about another 130.
Announcement of the deal "represents an outstanding example of public and private collaborations that are resulting in the growth of Connecticut's bioscience cluster," said Debra K. Pasquale,
president of Connecticut United for Research Excellence (CURE). At the end of 1998, according to CURE, the industry group, which includes biotechnology firms, pharmaceutical companies and academic research institutions, employed some 11,000 people statewide at an average annual salary of $50,000.
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