Neurologix Announces Third Quarter 2009 Financial Results

http://www.businesswire.com/news/home/20091112005078/en

FORT LEE, N.J.--(Business Wire)--
Neurologix, Inc. (OTCBB: NRGX) (the "Company"), a biotechnology company engaged
in the development of innovative gene therapies for the brain and central
nervous system, announced today its financial results for the third quarter and
nine months ended September 30, 2009.

For the three months ended September 30, 2009, the Company reported a net loss
of $3.5 million, as compared with a net loss of $1.6 million for the three
months ended September 30, 2008. The net loss for the three months ended
September 30, 2009 includes charges of $0.7 million recognized for the increase
in estimated fair value of the Company`s derivative liabilities relating to
certain warrants issued in connection with the Company`s Series D Convertible
Preferred Stock (the "Series D Stock") and the Company`s Series C Convertible
Preferred Stock (the "Series C Stock").

The Company reported a net loss applicable to common stock for the third quarter
of 2009 of $4.2 million, or $0.15 per basic and diluted share, as compared with
a net loss applicable to common stock of $2.4 million, or $0.08 per basic and
diluted share, for the same period in 2008. The net loss applicable to common
stock for the three months ended September 30, 2009 includes charges of $0.8
million, or $0.03 per basic and diluted share, related to preferred stock
dividends in connection with the Series D Stock and the Series C Stock. The net
loss applicable to common stock for the three months ended September 30, 2008
includes charges of $0.7 million, or $0.03 per basic and diluted share, related
to preferred stock dividends in connection with the Series D Stock and the
Series C Stock.

The Company reported a net loss of $10.6 million for the nine months ended
September 30, 2009, as compared with a net loss of $4.9 million for the nine
months ended September 30, 2008. The net loss for the nine months ended
September 30, 2009 includes charges of $2.7 million recognized for the increase
in estimated fair value of the Company`s derivative liabilities relating to
certain warrants issued in connection with the Series D Stock and the Series C
Stock.

The Company reported a net loss applicable to common stock for the nine months
ended September 30, 2009, of $12.8 million, or $0.46 per basic and diluted
share, as compared with $7.6 million, or $0.28 per basic and diluted share, for
the same period in 2008. The increase in net loss for 2009 over 2008 is
attributable primarily to increased clinical research costs associated with the
Company`s ongoing Phase 2 clinical trial for the treatment of advanced
Parkinson`s disease. For the nine months ended September 30, 2009, the net loss
applicable to common stock includes charges of $2.2 million, or $0.08 per basic
and diluted share related to preferred stock dividends in connection with the
Series D Stock and the Series C Stock. For the nine months ended September 30,
2008, the net loss applicable to common stock includes charges of $2.7 million,
or $0.10 per basic and diluted share related to the accretion of beneficial
conversion features ($0.8 million) in connection with the issuance of the Series
D Stock in April 2008, and preferred stock dividends ($1.9 million) in
connection with the Series D Stock and the Series C Stock.

Neurologix had cash and cash equivalents of approximately $11.8 million at
September 30, 2009.

John Mordock, President and Chief Executive Officer of Neurologix, noted that
these third quarter financial results were consistent with the Company`s
expectations.

"The Data Monitoring Committee has held its second meeting to review the
progress of the ongoing Phase 2 study of our novel gene transfer therapy for
advanced Parkinson`s disease," commented Mr. Mordock. "I am pleased to report
that this committee has recommended that the trial continue unmodified.
Enrollment has continued apace, and we remain on track to complete all surgeries
for the trial before year-end. This puts us on course for obtaining the first
efficacy results from this trial around mid-year 2010."

The Neurologix Quarterly Report on Form 10-Q, with financial statements and
management`s discussion of operations and results, can be found in the
"Investors" section of the Company`s website at http://www.neurologix.net.

About Neurologix

Neurologix, Inc. (NRGX.OB) is a clinical-stage biotechnology company dedicated
to the discovery, development, and commercialization of life-altering gene
transfer therapies for serious disorders of the brain and central nervous
system. Neurologix`s therapeutic approach is built upon the groundbreaking
research of its scientific founders and advisors, whose accomplishments have
formed the foundation of gene therapy for neurological illnesses. The Company`s
current programs address such conditions as Parkinson`s disease, epilepsy and
Huntington`s disease, all of which are large markets not adequately served by
current therapeutic options. For more information, please visit the Neurologix
website at http://www.neurologix.net.

Cautionary Statement Regarding Forward-looking Statements

This news release includes certain statements of the Company that may constitute
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended, and which are made pursuant to the Private Securities Litigation
Reform Act of 1995.These forward-looking statements and other information
relating to the Company are based upon the beliefs of management and assumptions
made by and information currently available to the Company.Forward-looking
statements include statements concerning plans, objectives, goals, strategies,
future events, or performance, as well as underlying assumptions and statements
that are other than statements of historical fact. When used in this document,
the words "expects," "promises," "anticipates," "estimates," "plans," "intends,"
"projects," "predicts," "believes," "may" or "should," and similar expressions,
are intended to identify forward-looking statements.These statements reflect the
current view of the Company`s management with respect to future events.Many
factors could cause the actual results, performance or achievements of the
Company to be materially different from any future results, performance or
achievements that may be expressed or implied by such forward-looking
statements, including, but not limited to, the following:

* The Company is still in the development stage and has not generated any
revenues. From inception through September 30, 2009, it incurred net losses and
negative cash flows from operating activities of approximately $44.9 million and
$34.5 million, respectively. Management believes that the Company will continue
to incur net losses and cash flow deficiencies from operating activities for the
foreseeable future. Because it may take years to develop, test and obtain
regulatory approval for a gene-based therapy product before it can be sold, the
Company likely will continue to incur significant losses for the foreseeable
future. Accordingly, it may never be profitable and, if it does become
profitable, it may be unable to sustain profitability.

* At September 30, 2009, the Company had cash and cash equivalents of
approximately $11.8 million, which management believes will be sufficient to
fund the Company`s operations through at least September 30, 2010. The Company
does not know whether additional financing will be available when needed, or if
available, will be on acceptable or favorable terms to it or its stockholders.
If the Company is unable to secure additional funding by December 31, 2009 or
shortly thereafter, its ability to continue as a going concern may be in doubt.
* The Company will need to conduct future clinical trials for treatment of
Parkinson`s disease using the Company`s NLX technology. If the trials prove
unsuccessful, future operations and the potential for profitability will be
materially adversely affected and the business may not succeed.

* There is no assurance as to when, or if, the Company will be able to
successfully receive approval from the FDA on its Investigational New Drug
Application to commence a Phase 1 clinical trial for the treatment of epilepsy.
* There is no assurance as to when, or if, the Company will be able to
successfully complete the required preclinical testing of its gene therapy for
the treatment of Huntington`s disease to enable it to file an Investigational
New Drug Application with the FDA for permission to begin a Phase 1 clinical
trial or that, if filed, such permission will be granted.

Other factors and assumptions not identified above could also cause the actual
results to differ materially from those set forth in the forward-looking
statements.Additional information about factors that could cause results to
differ materially from management`s expectations is found in the section
entitled "Risk Factors" in the Company`s 2008 Annual Report on Form
10-K.Although the Company believes these assumptions are reasonable, no
assurance can be given that they will prove correct.Accordingly, you should not
rely upon forward-looking statements as a prediction of actual results.Further,
the Company undertakes no obligation to update forward-looking statements after
the date they are made or to conform the statements to actual results or changes
in the Company`s expectations.

NEUROLOGIX, INC. AND SUBSIDIARY

(A Development Stage Company)

CONDENSED BALANCE SHEETS

(Amounts in thousands, except share and per share amounts)

September 30, December 31,
2009 2008
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 11,771 $ 18,906
Prepaid expenses and other current assets 346 323
Total current assets 12,117 19,229
Equipment, less accumulated depreciation of $602and $542 at September 30, 2009 and December 31, 2008, respectively 124 141
Intangible assets, less accumulated amortization of $243 and $182 at September 30, 2009 and December 31, 2008, respectively 848 748
Other assets 5 5
Total Assets $ 13,094 $ 20,123

LIABILITIES AND STOCKHOLDERS` EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 1,201 $ 850
Total current liabilities 1,201 850

Derivative financial instruments, at estimated fair value - Warrants 3,773 -
Total liabilities 4,974 850

Commitments and contingencies
Stockholders` equity:
Preferred stock; 5,000,000 shares authorized
Series A - Convertible, $0.10 par value; 650 shares designated, 645 shares issued and outstanding at September 30, 2009 and December 31, 2008, with an aggregate liquidation preference of $1. - -
Series C - Convertible, $0.10 par value; 700,000 shares designated, 281,263 and 285,878 shares issued and outstanding at September 30, 2009 and December 31, 2008, respectively, with an aggregate liquidation preference of $7,301 and $5,863 at September 30, 2009 and December 31, 2008, respectively. 28 29
Series D - Convertible, $0.10 par value; 792,100 shares designated, 734,898 shares issued and outstanding at September 30, 2009 and December 31, 2008, with an aggregate liquidation preference of $29,900 and $27,031 at September 30, 2009 and December 31, 2008, respectively. 73 73
Common Stock:
$0.001 par value; 100,000,000 shares authorized, 27,865,010 and 27,764,058 issued and outstanding at September 30, 2009 and December 31, 2008, respectively. 28 28
Additional paid-in capital 56,664 62,393
Deficit accumulated during the development stage (48,673 ) (43,250 )
Total stockholders` equity 8,120 19,273
Total Liabilities and Stockholders` Equity $ 13,094 $ 20,123

NEUROLOGIX, INC. AND SUBSIDIARY
(A Development Stage Company)

CONDENSED STATEMENTS OF OPERATIONS

(UNAUDITED)

(Amounts in thousands, except share and per share amounts)
Nine Months Ended Three Months Ended For the period
September 30, September 30, February 12, 1999
(inception) through

September 30, 2009
2009 2008 2009 2008
Revenues $ - $ - $ - $ - $ -
Operating expenses:
Research and development 5,779 2,911 2,121 1,082 25,396
General and administrative expenses 2,179 2,495 631 734 18,279
Loss from operations (7,958 ) (5,406 ) (2,752 ) (1,816 ) (43,675 )

Other income (expense):
Dividend, interest and other income 55 478 6 167 1,881
Interest expense-related parties - - - - (411 )
Change in estimated fair value of derivative financial instruments - Warrants (2,703 ) - (723 ) - (2,703 )
Other (expense) income, net (2,648 ) 478 (717 ) 167 (1,233 )
Net loss (10,606 ) (4,928 ) (3,469 ) (1,649 ) $ (44,908 )

Preferred stock dividends (2,208 ) (1,937 ) (757 ) (707 )
Charge for accretion of beneficial conversion feature - (562 ) - -
Charge for contingent beneficial conversion feature - (212 ) - -
Net loss applicable to common stock $ (12,814 ) $ (7,639 ) $ (4,226 ) $ (2,356 )

Net loss applicable to common stock per share, basic and diluted $ (0.46 ) $ (0.28 ) $ (0.15 ) $ (0.08 )

Weighted average common shares outstanding, basic and diluted 27,819,156 27,668,255 27,865,010 27,738,379

Neurologix
Marc Panoff, Chief Financial Officer, Treasurer and Secretary, 201-592-6451
marcpanoff@neurologix.net
or
Kureczka/Martin Associates
Joan Kureczka, 415-821-2413 (Media)
Jkureczka@comcast.net

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