Mematine helps NTI's balance

Neurobiological Technologies, of Richmond CA, announced a net loss of $2,675,000, or $0.10 per share, for its quarter ended December 31, 2004. This compares with a net loss of $1,059,000, or $0.06 per share, for the same quarter a year ago.

'We are pleased at the progress made since the start of the last quarter and shortly after,' stated Paul Freiman, president and chief executive officer. 'Viprinex (ancrod), a late-stage reperfusion therapy for use in the treatment of ischemic stroke, received fast-track status from the FDA, a significant step forward in our pivotal trial program. The Xerecept Phase III trial, for peritumoral brain edema, recruited more patients, leading to an investigator meeting this month for the initiation of a planned second Phase III trial. Sales of Memantine in the US by Forest Laboratories for Alzheimer's disease continue to grow strongly, providing us with a significant income stream. Memantine continues to be developed by Forest for neuropathic pain in several clinical trials. I believe that most businesses, like sports teams, win on the basis of doing the basic things well. We believe that we are advancing steadily and well on all fronts, and I am confident and excited about NTI's future.'

Revenues of $694,000 in the quarter ended December 31, 2004 increased by $394,000 compared with revenues of $300,000 in the same quarter of 2003 and consist of royalty fees from the sale of Memantine in the US and in certain European countries. Revenues of $300,000 in the quarter ended December 30, 2003 consist of $281,000 of license fees relating to the approval for sale of Memantine and $19,000 of royalty fees from the sale of Memantine in certain European countries.

Research and development expenses of $2,269,000 in the quarter ended December 31, 2004 increased by $1,756,000 compared with expenses of $513,000 in the same quarter of 2003. The increase resulted from expenses incurred to prepare for Phase III clinical trials of Viprinex, which are anticipated to commence within the next nine months, and for continuing the Phase III clinical trials for Xerecept, the first of which was initiated during April 2004.

General and administrative expenses of $1,090,000 in the quarter ended December 31, 2004 increased by $235,000 compared to $855,000 for the same quarter in 2003, and resulted primarily from expense for the administrative operations of the New Jersey office established for the development of Viprinex subsequent to our acquisition of Empire in July 2004, together with professional fees related to public reporting and compliance with the Sarbanes-Oxley Act of 2002. At December 31, 2004, we had cash, cash equivalents and investments of $15,127,000.