NeurogesX Reports Third Quarter 2012 Results

NeurogesX Reports Third Quarter 2012 Results

Recent Highlights:

  * End-of-Phase 2 FDA interaction sets guidance to enable initiation of
    NGX-1998 Phase 3 studies
  * Presented NGX-1998 Phase 2 trial data at World Congress; showed clear dose
    response from well-tolerated treatment

SAN MATEO, Calif., Nov. 14, 2012 (GLOBE NEWSWIRE) -- NeurogesX, Inc.
(OTCQB:NGSX) (OTCBB:NGSX), a specialty pharmaceutical company focused on
developing and commercializing a portfolio of novel non-opioid, pain
management therapies, today provided an update on recent developments and
reported results for its third quarter ended September 30, 2012.

Ronald Martell, President and CEO, stated, "We continue on track with our goal
to enable the initiation of our Phase 3 clinical program with NGX-1998, our
next generation liquid formulation of prescription-strength capsaicin, by the
end of the year. Based on our End-of-Phase 2 interaction with the FDA
regarding our proposed development program, we could expect to begin enrolling
patients in the first quarter of 2013."

Recent Developments

In August 2012, NeurogesX received End-of-Phase 2 guidance from the U.S. Food
and Drug Administration ("FDA") regarding its previously announced plans for
the Phase 3 clinical development of NGX-1998 as a treatment for neuropathic
pain conditions, including key elements of its overall development plan
related to manufacturing, applicator development and clinical trial design.

Also in August 2012, data from the Company's Phase 2 study for NGX-1998 was
presented at the 14th World Congress on Pain in Milan, Italy. The presentation
highlighted the Company's Phase 2 clinical trial, a multicenter,
placebo-controlled, double-blind trial in PHN. The results from the trial
indicated that NGX-1998 may be a safe, efficacious and convenient treatment
for patients with PHN and other types of neuropathic pain.

Third Quarter 2012 Results

Total revenue for the third quarter ended September 30, 2012 was $2.8 million,
which consisted of $2.2 million in collaboration revenue, primarily from the
amortization of upfront license fees received under the Astellas Agreement,
and $0.6 million in U.S. Qutenza revenue recognition. U.S. Qutenza recognized
revenue in the third quarter of 2012 was $0.3 million lower than the second
quarter of 2012. As a result of NeurogesX' decision in March 2012 to suspend
direct promotional activities, the Company has observed a decrease in end user
demand for Qutenza in the United States and as a result, the Company expects
that future revenue from U.S. Qutenza sales will be lower. Included in
collaboration revenues in the third quarter was $0.4 million of royalties
recognized from Astellas sales of Qutenza in the Astellas Territory. This
represents royalties from Astellas' second quarter of 2012 activity and was up
from $0.3 million recognized in the third quarter of 2011.

Operating expenses for the third quarter of 2012 were $4.2 million, compared
to $11.5 million in the third quarter of 2011. The lower operating expenses in
the current quarter reflected the lower expense levels following the March
2012 reorganization.

Cost of goods sold for the third quarter of 2012 was $72,000, compared to
$279,000 in the third quarter of 2011. Cost of goods sold includes product
costs, fixed monthly charges related to the Company's third party logistics
provider for warehousing and shipping activities, excess inventory charges and
royalty obligations due to intellectual property licensors.

Research and development expenses for the third quarter of 2012 were $1.3
million, compared to $3.0 million in the third quarter of 2011. The
year-over-year change reflected lower employee related costs resulting from
restructuring plans implemented in both October 2011 and March 2012.
Additionally, development costs were lower in the third quarter of 2012 due to
lower spending on non-clinical development programs related to both Qutenza
and NGX-1998, lower external consulting costs and lower spending associated
with the Phase 2 clinical trial for NGX-1998 in the third quarter of 2012.

Selling, general and administrative expenses for the third quarter of 2012
were $2.8 million, compared to $8.2 million in the third quarter of 2011. This
decrease was primarily related to the Company's decision to stop direct
promotional activities of Qutenza in March 2012 as well as the broader effect
of the restructuring activities implemented in October 2011 and March 2012.

Net loss for the third quarter of 2012 was $3.8 million, or $0.11 per share,
compared to a net loss of $11.4 million, or $0.43 per share, for the third
quarter of 2011.

Cash, cash equivalents and short-term investments were $17.5 million at
September 30, 2012, compared to $34.3 million at December 31, 2011.

About NeurogesX, Inc.

NeurogesX, Inc. (OTCQB:NGSX) (OTCBB:NGSX) is a specialty pharmaceutical
company focused on developing and commercializing a portfolio of novel
non-opioid, pain management therapies to address unmet medical needs and
improve patients' quality of life.  

The Company's lead product, Qutenza^®, is currently approved in the United
States and the European Union. Qutenza is available in the United States for
the management of neuropathic pain associated with PHN. In Europe, Qutenza is
being marketed by Astellas Pharma Europe Ltd. ("Astellas"), the European
affiliate of Tokyo-based Astellas Pharma Inc., for the treatment of peripheral
neuropathic pain in non-diabetic adults, either alone or in combination with
other medicinal products for pain.

The Company's most advanced product candidate, NGX-1998, is a topically
applied liquid formulation containing a high concentration of capsaicin
designed to treat pain associated with neuropathic pain conditions. NGX-1998
has completed three Phase 1 clinical trials and one Phase 2 clinical trial in
PHN patients, and the Company believes that NGX-1998 is ready to enter Phase 3
development. 

The Company's early-stage pipeline includes pre-clinical compounds which
include a number of prodrugs of acetaminophen. The Company has evaluated
certain of these compounds in vitro and in vivo.

Safe Harbor Statement

This press release contains forward-looking statements for purposes of the
Private Securities Litigation Reform Act of 1995 (the Act). NeurogesX
disclaims any intent or obligation to update these forward-looking statements,
and claims the protection of the Safe Harbor for forward-looking statements
contained in the Act. Examples of such statements include but are not limited
to: the planned entry of NGX-1998 into Phase 3 development and the expected
timing of entry into, and beginning enrollment for, a Phase 3 trial and
expectations of lower revenues from future sales of Qutenza. Such statements
are based on management's current expectations, but actual results may differ
materially due to various risks and uncertainties, including, but not limited
to: difficulties or delays in the clinical development of NGX-1998, including
difficulties or delays in initiating Phase 3 development of NGX-1998 and in
beginning enrollment; difficulties or delays in obtaining additional resources
for continuing operations in general and for development of NGX-1998 in
particular; difficulties in obtaining new, or maintaining current, strategic
partnerships for the development or commercialization of NGX-1998 and Qutenza;
and development by others of competitive therapies for indications that
NeurogesX' product and product candidates target. For further information
regarding these and other risks related to NeurogesX' business, investors
should consult NeurogesX' filings with the Securities and Exchange Commission.

 NEUROGESX, INC. 
 Consolidated Statements of Operations 
 (in thousands, except per share information) 
                                                                    
                                Three Months Ended     Nine Months Ended
                                September 30,          September 30,
                                2012       2011        2012        2011
 Net product revenue             $ 583      $ 763       $ 2,258     $ 1,825
 Collaborative revenue           2,251      2,128       6,606       6,720
 Total revenues                  2,834      2,891       8,864       8,545
                                                                    
Operating expenses:                                                 
Cost of goods sold               72         279         847         534
Research and development         1,326      2,953       5,798       11,154
Selling, general and             2,776      8,239       13,463      28,871
administrative 
Total operating expenses         4,174      11,471      20,108      40,559
Loss from operations             (1,340)    (8,580)     (11,244)    (32,014)
Interest income                  8          15          31          61
Interest expense                 (2,475)    (2,799)     (9,163)     (7,298)
Other (expense) income, net      (8)        (11)        (84)        (53)
Net loss                         $ (3,815)  $ (11,375)  $ (20,460)  $ (39,304)
                                                                    
Basic and diluted net loss per   $ (0.11)   $ (0.43)    $ (0.63)    $ (1.89)
share 
                                                                    
Shares used to compute basic     33,244     26,372      32,703      20,746
and diluted net loss per share 

 
 NEUROGESX, INC. 
 Consolidated Balance Sheets 
 (in thousands, except share and per share data) 
                                                              
                                          September 30,      December 31,
                                          2012               2011
                                          (unaudited)        (note 1)
 Assets                                                       
Current assets:                                               
Cash and cash equivalents                  $ 7,955            $ 9,148
Short-term investments                     9,544              25,161
Trade receivable                           446                1,166
Receivable from collaborative partner      67                 502
Inventories                                53                 654
Prepaid expenses and other current         1,120              1,364
assets 
Restricted cash                            160                160
Total current assets                       19,345             38,155
                                                              
Property and equipment, net                264                547
Restricted cash                            50                 251
Other assets                               343                274
Total Assets                               $ 20,002           $ 39,227
Liabilities and Stockholders' Deficit                         
Liabilities                                                   
Current Liabilities                                           
Accounts payable                           $ 380              $ 1,321
Accrued compensation                       933                2,084
Accrued research and development           284                282
Other accrued expenses                     903                2,245
Deferred product revenue, net              364                1,075
Deferred collaborative revenue             7,242              7,261
Long-term obligations - current portion    8,402              4,829
Total current liabilities                  18,508             19,097
Non-current liabilities                                       
Deferred collaborative revenue             19,681             25,098
Other long-term liabilities                162                146
Long-term obligations, net of current      64,722             62,746
portion 
Total non-current liabilities              84,565             87,990
Commitments and contingencies                                 
Stockholders' deficit:                                        
Preferred stock                            --                 -- 
Common stock                               33                 30
Additional paid-in capital                 243,427            238,181
Accumulated other comprehensive income     1                  1
Accumulated deficit                        (326,532)          (306,072)
Total stockholders' deficit                (83,071)           (67,860)
Total liabilities and stockholders'        $ 20,002           $ 39,227
deficit 
                                                              
Note 1 -- The balance sheet at December 31, 2011 has been derived from the
audited consolidated financial statements at that date.

CONTACT: NeurogesX, Inc.
         Stephen Ghiglieri
         Executive Vice President, COO and CFO
         (650) 358-3310

         Additional Contacts:
         The Ruth Group
         Stephanie Carrington /
         Nicole Greenbaum (investors)
         (646) 536-7017 / 7009
         scarrington@theruthgroup.com /
         ngreenbaum@theruthgroup.com  

         Tracy Lessor (media)
         (646) 536-7006
         tlessor@theruthgroup.com