NeuroSearch A/S - Q3 Report 2007

Announcement


NeuroSearch A/S - Q3 Report 2007

Today, the Board of Directors adopted the interim report for the period 1
January to 30 September 2007. 
A loss after tax of DKK 222.9 million (a loss of DKK 132.2 million in the same
period of 2006) was posted. The comparative figures for the nine months ended
30 September 2006 do not include NeuroSearch Sweden AB, which was acquired in
Q4 2006. 
NeuroSearch's capital resources stood at DKK 258.0 million at 30 September 2007
(DKK 287.1 million at 30 September 2006). 
In 2007 to date, NeuroSearch has continued strong progress of its activities
and generated very significant added value in its pipeline of drug candidates.
The pipeline now includes 20 development programmes with a total of 17 drug
candidates, two of which - ACR16 for the treatment of Huntington's disease and
tesofensine for the treatment of obesity - are under preparation for pivotal
Phase III clinical studies. Moreover, five development programmes are in Phase
II with a view to obtaining a number of important milestones including
proof-of-concept for indications such as depression, ADHD (Attention Deficit
Hyperactivity Disorder) and pain. Overall, eleven programmes are in clinical
development and nine are in preclinical development. 

Highlights of material pipeline events from Q3 2007 and the following period:

	In late September, NeuroSearch filed an application (a clinical trial
application) with the European regulatory authorities for Phase III studies to
be commenced in Europe with the drug candidate ACR16 in Huntington's disease.
In addition, an application to the US regulatory authorities is being prepared
for studies under the Phase III programme to be initiated. 
	In mid-September, NeuroSearch published breakthrough results from a Phase IIb
proof-of-concept study of tesofensine for the treatment of obesity (“TIPO-1”).
The study results showed that 24 weeks of treatment with 0.25 mg, 0.5 mg and 1
mg of tesofensine led to a significant and dose-dependent weight loss of 6.5%,
11.2% and 12.6% respectively, compared to 2.0% in the placebo group. 
	In September, NeuroSearch's licence partner, Abbott, began a Phase II
clinical study of ABT-894 for the treatment of diabetic neuropathic pain.
Abbott is also evaluating ABT-894 in Phase II in ADHD, in a study for which
patient enrolment has now been completed. 
	In July, Abbott began a Phase I study of ABT-560, which modulates a specific
subtype neuronal nicotinic receptor (NNR). ABT-560 is being developed for the
treatment of different kinds of cognitive disorders and is the third drug
candidate in clinical development under the Abbott partnership. 
	In August, NeuroSearch selected a further new compound from its drug
discovery programmes for development: NSD-761, a selective ion channel
modulator that has shown promising effect in preclinical models for cognitive
dysfunction. This was the fifth new development candidate from NeuroSearch's
R&D platform to be progressed to the pipeline in 2007. 

On 27 November 2007, NeuroSearch announced the results of a capital increase in
the form of an offering of up to 2,765,593 new shares with a nominal value of
DKK 20. The new shares were offered with preemptive rights to existing
shareholders. The offering was 99.6% subscribed with a total of 2,754,579 new
shares subscribed at a price of DKK 280 per share, corresponding to net
proceeds to NeuroSearch of DKK 728.7 million. 

In continuation of the completed rights issue, NeuroSearch will convene an
extraordinary general meeting with a view to obtaining a new authorisation to
the Board of Directors, during the period ending on 31 December 2011, to
increase the company's share capital with a total nominal sum of up to DKK
76,000,000 or 3,800,000 shares of a nominal value of DKK 20 per share. The
extraordinary general meeting will be held on 10 December at 4.00 pm at
NeuroSearch's address, Pederstrupvej 93, DK-2750 Ballerup, Denmark. 

Included in the notice of an extraordinary general meeting, NeuroSearch's Board
of Directors has decided to propose Thomas Hofman-Bang, President and CEO of
NKT Holding A/S, as a new member of the Board of Directors. NeuroSearch
believes that Thomas Hofman-Bang has the right competences to make him a
valuable supplement to the existing Board of Directors and which competences
are important for the company's continuing development and growth. 

Including the net proceeds from the offering, NeuroSearch's capital resources
now constitute a strong basis for progressing further the company's
comprehensive pipeline of products under development and for ensuring the best
possible conditions for entering into attractive licence agreements with
collaborative partners. 
Nine of NeuroSearch's pipeline programmes are developed and financed under
licence agreements with multinational pharmaceutical groups, involving
substantial earnings potential for NeuroSearch by way of milestone payments and
attractive royalties on future sales by the partners. 
Management considers the performance for the first three quarters of 2007 to be
highly satisfactory. 

Flemming Pedersen, CEO of NeuroSearch commented: 
“We have continued our very positive progress with breakthrough clinical
results for tesofensine for the treatment of obesity, the start-up of a Phase
III programme within Huntington's disease and with an innovative drug discovery
platform which continuously supplies new, unique pipeline candidates to our
increasingly valuable pipeline. We now also have strong capital resources which
give us the necessary basis for making the right strategic decisions to ensure
that NeuroSearch can make the next quantum leap forward”. 


Asger Aamund
Chairman of the Board

Telephone conference: 
A telephone conference will be held this afternoon at 3.00 pm Copenhagen time
at which CEO Flemming Pedersen, Vice President and CFO Anita Milland and Vice
President and Director of IR & Corporate Communications Hanne Leth Hillman will
present the Q3 report and answer questions. The telephone conference will be
conducted in English and the telephone number is +45 3271 4611 (UK: +44 (0)20
7162 0125). The related powerpoint presentation will be available at
www.neurosearch.com. 
 
Contacts:	
Flemming Pedersen, CEO
Telephone: +45 4460 8214 or +45 2148 0118

Hanne Leth Hillman, Vice President, Director of Investor Relations & Corporate
Communications 
Telephone: +45 4460 8212 or +45 4017 5103


NeuroSearch (NEUR) is a Scandinavian biopharmaceutical company listed on the
OMX Nordic Exchange Copenhagen A/S. Our core business covers the development of
novel drugs, based on a broad and well-established drug discovery platform
focusing on ion channels and CNS disorders. A substantial part of the Company's
activities are partner financed through a broad alliance with GlaxoSmithKline
(GSK) and collaborations with among others Abbott and Astellas. The drug
pipeline comprises 11 clinical (Phase I-III) development programmes: ACR16 in
Huntington's disease (Phase III in preparation), tesofensine in obesity (Phase
III in preparation), NS2359 in depression (Phase II) and ADHD (Phase II) in
partnership with GSK, NS1209 in epilepsy and pain (Phase II), ABT-894 in ADHD
(Phase II) and pain (Phase II) in partnership with Abbott, ACR16 in
schizophrenia (Phase I) in partnership with Astellas, ACR325 in bipolar
disorder and Parkinson's disease (Phase I) and ABT-107 as well as ABT-560 for
the treatment of various CNS diseases - both (Phase I) in collaboration with
Abbott. In addition, NeuroSearch has a broad portfolio of preclinical drug
candidates and holds equity interests in several biotech companies. 
 
MANAGEMENT'S REPORT
Drug candidates in development 
NeuroSearch's pipeline of drug candidates in development includes 20 programmes
for the treatment of a large number of diseases - primarily related to the
central nervous system (CNS). The pipeline has grown and matured substantially
over the year, continuing the favourable progress seen in 2006. Eleven of the
drug programmes are in clinical development, which is the largest number in the
history of NeuroSearch. Moreover, the company has nine preclinical drug
candidates, most of which are expected to move into clinical development within
the coming 3 -12 months. Below is a graphic representation of NeuroSearch's
pipeline: 

 
ACR16 - Huntington's disease: Phase III programme initiated
NeuroSearch has completed the Phase III preparations for ACR16, and in
September an application was filed for start-up of Phase III clinical studies
in Europe with this drug candidate for the treatment of Huntington's disease.
In addition, NeuroSearch is preparing to file an IND application with the US
health authorities (FDA) for the start-up of a three-month clinical study in
the United States. These studies in the United States and Europe are expected
to form the basis of international market registrations of ACR16 for
symptomatic treatment of Huntington's disease. 

The European Phase III programme will involve several centres in a number of
countries and is planned as a randomised, double-blinded, placebo-controlled
study of ACR16 (45 mg or 90 mg daily doses) for symptomatic treatment of
Huntington's disease. It is expected that about 420 patients will be enrolled
in the study, and treatment will run over six months. The selected primary
endpoint in Phase III a change in is patients' motor function measured as the
change from the baseline in the modified Motor Score (mMS), which is a subscale
of the Unified Huntington's Disease Rating Scale (UHDRS). The mMS measures the
negative motor symptoms in patients with Huntington's disease, including
parkinsonism and gait disorder. It is well established that these symptoms show
a strong correlation with patients' functional decline over time. The secondary
endpoint is to evaluate patients' overall improvement, effects on behaviour,
symptoms of depression and anxiety, and cognitive functions, in addition to an
evaluation of the safety and tolerability of ACR16. 

Prior to the start-up of Phase III studies, NeuroSearch has re-evaluated data
from a Phase II study of ACR16 in Huntington's patients in a post-hoc analysis
based on the primary endpoint for the Phase III programme. The analysis showed
that, after four weeks' treatment with ACR16, patients in the study achieved a
statistically significant improvement of their motor function, measured as an
mMS value, relative to the placebo group. The improvement, measured as an mMS
value, is considered to be clinically highly relevant as it corresponds to
about one year's deterioration in motor functions for this patient group. 

ACR16 belongs to the group of drug candidates called dopaminergic stabilisers,
i.e. CNS active compounds, which can both strengthen and inhibit dopaminergic
effects in the brain, depending on depending on the dopamine activity at base
level. Doperminergic stabilisers can thus stabilise behaviour and motor
disturbances caused by neurological and psychiatric disorders without having a
negative impact on normal thought processes or motor functions. ACR16 has been
successfully studied in a Phase II multi-centre, randomised and
placebo-controlled study in patients with Huntington's disease and in three
Phase Ib studies in Huntington's disease, Parkinson's disease and schizophrenia
respectively. 

Concurrently with the Phase III preparations, NeuroSearch has initiated the
preparation of marketing plans for ACR16. 

Huntington's disease
Huntington's disease is a fatal, hereditary disease caused by a faulty gene on
chromosome 4 which damages nerve cells in several parts of the brain. Patients
suffering from Huntington's disease experience a wide variety of symptoms which
may be grouped into three categories, and which are therefore often referred to
as the “symptoms triad”: motor, cognitive and psychiatric. The motor symptoms
include both positive motor disruptions such as chorea (strong involuntary
movements), muscle spasms and tics such as negative motor disruptions,
including parkinsonism, difficulty in walking, muscle rigidity, and in the
later stages of the disease also swallowing difficulties. The most significant
cognitive symptoms are dementia, including difficulties in communicating and
planning. Depression is the most common psychiatric symptom of Huntington's
disease. 

Around 70,000 persons are estimated to suffer from Huntington's disease in the
United States and Europe, and approximately 400.000 are at risk of having
inherited the disease. The symptoms of Huntington's usually appear when people
are between 30 and 45 years of age, and the disease then progresses without
improvement over a period of 10 to 25 years. There is no effective treatment
and therefore there is a great unmet demand for new medical treatment of
Huntington's disease. In spite of this, the number of drug candidates in
development for the treatment of the disease is limited. 
Tesofensine - Obesity Breakthrough results 
NeuroSearch has completed a Phase IIb poof-of-concept and dose finding study
(“TIPO-1”) with the drug candidate tesofensine for the treatment of obesity
with very positive results. Data from the study, which comprised 203 patients,
showed that 24 weeks' treatment with 0.25 mg, 0.5 mg and 1 mg tesofensine
respectively resulted in a dose-dependent average weight loss of 6.5%, 11.2%
and 12.6% respectively, compared to 2.0% in the placebo group. In all treatment
groups, the primary endpoints were met with high statistical significance. The
secondary endpoints of the study, including a fall in BMI (Body Mass Index
(kg/m2)) and a reduction in waist circumference, were also achieved. The weight
loss after 24 weeks' treatment with tesofensine was almost twice as large as
that achieved by 12 months' treatment with existing obesity drugs. 
 
The results from the TIPO-1 study also showed that tesofensine has a good
safety profile and was well tolerated. The most frequently reported adverse
events were mainly mild to moder¬ate and included dry mouth, sleep
disturbances, nausea, constipation and diarrhoea. In line with tesofensine's
pharmacologi¬cal profile, there was a tendency towards an increased number of
adverse event observations in the highest dose groups (0.5 mg and 1.0 mg). A
similar pattern was observed when measuring cardiovascular effects, with slight
increases in heart rate and blood pressure. 

Conclusions from the TIPO-1 study show a clear, dose-dependent weight reducing
effect of tesofensine with a significant and clinically relevant effect already
at the lowest dose level (0.25 mg). This leaves promising prospects for the
further development of tesofensine as a new preferred medical alternative for
the treatment of obesity. 

Ongoing tesofensine studies (TIPO-2 and TIPO-4)
NeuroSearch is conducting an additional human metabolic study with tesofensine
(“TIPO-2”), to evaluate the drug candidate's direct effect on metabolic
parameters such as insulin, glucose and cholesterol levels. The study includes
about 30 patients. 
Further, in June 2007 NeuroSearch initiated an open-label Phase II extension
study, TIPO-4, with tesofensine, offering all patients having concluded 24
weeks' treatment in TIPO-1 with tesofensine or placebo another 24 weeks'
treatment. In TIPO-4, the dosing of tesofensine is 0.5 mg daily for all
patients with the possibility to increase to 1.0 mg daily, subject to
tolerability and effect. The aim of TIPO-4 is to further evaluate tesofensine's
safety profile and tolerability as well as to generate additional observations
on maintenance of effect (weight reduction) after up to 12 months. The patients
in TIPO-4 will follow the same diet and exercise programme as in TIPO-1. To
date, approximately 90% of the patients having completed TIPO-1 have chosen to
continue tesofensine treatment in TIPO-4. Results from TIPO-4 are expected in
the first half of 2008. 

Tesofensine is a drug that blocks the re-uptake of the neurotransmitters
dopamine and noradrenaline and to a lesser extent serotonin, thereby increasing
the concentration of all three neurotransmitters in the brain. These three
neurotransmitters are in different ways implicated in regulation of food
intake, metabolism and subsequent weight control. The unique triple profile of
tesofensine and the balanced modulation of all three transmitter systems is the
reason for the ability of the com¬pound to induce a weight reduction in obese
patients. 

Overweight/obesity
According to the World Health Organization (WHO), obesity has reached epidemic
proportions globally, with up to 1.6 bil¬lion adults (over 15 years old)
overweight and at least 400 million of them clinically obese (BMI > 30). This
rising epidemic is a major contributor globally to the social burden of chronic
disease and disability, resulting in lower productivity. The prevalence of
obesity has risen threefold in less than two decades. This rapidly growing
epidemic shows no signs of slowing, according to Datamonitor. 
Overweight and obesity leads to the development of one or more serious medical
conditions which can cause poor health and premature death, including in
particular type 2 diabetes. As many as 90% of individuals with type II diabetes
are reported to be overweight or obese. In addition, obesity increases the risk
of cardiovascular disease and is a major risk factor for heart attack and
ischemic stroke. Over 75% of hypertension cases are reported to be directly
attributed to obesity. 
NS2359 (GSK372475) - depression and ADHD: In clinical Phase II 
NS2359 is a monoamine reuptake inhibitor with a triple mode of action,
affecting the three neurotransmitters serotonin, noradrenaline and dopamine.
This mode of action holds the potential to produce a better and faster
reduction of the symptoms of depression than seen with existing
antidepressants. It is expected that drugs with this triple mode of action will
become an important future therapy for depression. 
Under the terms of an option agreement with GlaxoSmithKline (GSK), GSK has the
worldwide rights to develop and market NS2359, and GSK is con¬ducting a Phase
II programme with the drug candidate in major depressive disorder (MDD). The
programme consists of two Phase II clinical studies, in total involving
approximately 900 patients. 
The first Phase II study started enrolling patients suffering from MDD in late
2006 in a randomised, double-blinded parallel study, in which, during a
ten-week treatment period, NS2359 will be compared with placebo and paroxetine,
an SSRI marketed by GSK under the product names Paxil®/Seroxat®. The second
Phase II study was initiated in mid-April 2007, and in this study, during a
ten-week treatment period, NS2359 will be compared with venlafaxine XR, an SNRI
(serotonin, noradrenaline reuptake inhibitor) which is also on the market for
depression. Both studies are following the plans. 
Under the terms of the licence agreement, GSK is financing all development
costs relating to NS2359, and NeuroSearch is entitled to sizeable payments on
the attainment of development milestones as well as attractive royalties on
GSK's global future sales of the product. 
ABT-894 - ADHD and neuropathic pain: Two Phase II programmes 
NeuroSearch's development and licence partner, Abbott, is developing the drug
candidate ABT-894 for two indications: In April 2007, the first Phase II study
was initiated of ABT-894 for the treatment of ADHD in adults. Patient enrolment
for the study has been completed and the study is progressing as scheduled. 
In July 2007, Abbott initiated an additional Phase II programme in the form of
a randomised, double-blinded, placebo-controlled study in diabetic neuropathic
pain, which is a severe, chronic pain condition. The study is progressing
according to plan. 
ABT-894 is a subtype selective NNR modulator, which has shown promising effects
in preclinical models for pain and other central and peripheral nervous system
diseases. 
Under the terms of the licence agreement, Abbott is responsible for the
clinical development and commercialisation of ABT-894 and will finance all
development costs. NeuroSearch will receive milestone payments as well as
royalties on Abbott's future global sales. 
NS1209 - epilepsy (status epilepticus)/pain: In Phase II 
NeuroSearch has investigated the drug candidate NS1209 in two small Phase IIa
clinical studies in status epilepticus (severe and prolonged epileptic
seizures) as well as in a small Phase I/II study in neuropathic pain. Based on
the combined results of these clinical studies, NeuroSearch has decided to seek
a partner with supplementary specialist competences for the contin¬ued
development of NS1209. 

ACR16 - Schizophrenia: In Phase Ib 
ACR16 is being evaluated in a Phase Ib study by NeuroSearch's partner Astellas,
which has the right to develop and market the drug candidate for the treatment
of schizophrenia and all other indications except for Huntington's disease in
the European Union, Norway, Switzerland, the United States and Canada. 
ACR16 is a dopaminergic stabiliser representing a new principle in the
treatment of schizophrenia. The compound has been shown to be effective in
models for schizophrenia, while leaving the normal behaviour of animals
unaffected in the same models. This leads to an expectation that treatment with
ACR16 will not impair schizophrenic patients' normal functions dependent on the
transmission of dopamine, such as locomotion, motivation and reward, which will
be a major potential advantage over existing antipsychotic therapies. 
Under the terms of the licence agreement, Astellas has undertaken to finance
all development costs except those relating to Huntington's disease, and
NeuroSearch will receive up to EUR 84 million in milestone payments and
royalties on Astellas' global sales of the product. 

ACR325 - Parkinson's disease and bipolar disorder: In Phase I 
NeuroSearch evaluates ACR325 in Phase I clinical studies with a view to
developing the product for the treatment of Parkinson's disease and psychoses,
including bipolar disorder. The existing therapies for these disease
indications have either a limited effect or considerable adverse side effects. 
ACR325 is a dopaminergic stabiliser which has demonstrated promising effects in
preclinical models for psychosis. The compound increases the levels of dopamine
and noradrenaline in the forebrain and concurrently inhibits the over activity
of dopamine in other regions of the brain without this causing undesired
inhibiting of voluntary movement. This indicates that, as opposed to marketed
drugs against psychoses and Parkinson's disease, ACR325 has a clinical profile
with limited adverse side effects. 
NeuroSearch plans to initiate the first Phase II study of ACR325 in the first
half of 2008. 
Other drug candidates under development within the Abbott partnership
concerning neuronal nicotinic receptor (NNR) modulators: ABT-107, ABT-560 and
NSD-683 
Significant progress has also been achieved in 2007 within the framework of the
development and licence agreement with Abbott regarding NNR modulators. In
addition to ABT-894, which is now in Phase II development for two major
indications, Abbott has initiated clinical studies of two other NNR modulators
under the terms of the agreement. 
ABT-107 was selected as a new drug candidate in Q1 2006, and Abbott initiated a
Phase I study of the compound in April 2007. In preclinical studies, ABT-107
has shown a potential for the treatment of cognitive dysfunctions related to a
number of CNS indications, including ADHD, schizophrenia and Alzheimer's
disease. The Phase I programme is progressing as scheduled. 
ABT-560 was also selected as a new development candidate for the treatment of a
number of CNS diseases in 2006. In late July, Abbott began a Phase I clinical
study of ABT-560 with a view to developing this drug candidate for the
treatment of cognitive dysfunctions. 
Cognitive dysfunctions include conditions ranging from relatively benign, mild
cognitive impairment to dementia, which may be extremely debilitating. Symptoms
of cognitive dysfunctions are impairment in thinking, reasoning, concentration,
memory and slower language fluency. Cognitive dysfunction is not an indication
in itself, but the general term for a variety of symptoms manifesting
themselves in connection with dementia, schizophrenia, multiple sclerosis,
ADHD, bipolar disorder, depression and Huntington's disease. 
In addition to the three clinical NNR programmes, Abbott is conducting
preclinical development studies of another drug candidate: NSD-683. 
Under the terms of the agreement, Abbott is responsible for all clinical
development and the commercialisation of all products from the partnership. In
addition, Abbott has undertaken to pay milestones to NeuroSearch and royalties
on its global sales. 
Preclinical drug candidates: ACR343, NSD-644, NSD-708, NSD-788, NSD-503,
NSD-726, NSD-721 and NSD-761 (see above for NSD-683) 
Since the turn of the year, NeuroSearch has announced five new development
candidates from its drug discovery programmes. This increased the total number
of drug candidates in preclinical development to nine (including NSD-683 which
is being developed in a partnership with Abbott) of which most are expected to
move into clinical development (Phase I) with the next 3-6 months. 

Below are brief descriptions of the eight preclinical programmes handled by
NeuroSearch alone - including NSD-644 which is being developed and financed
under the alliance with GSK: 
 
-	ACR343 is a dopaminergic stabiliser in development for the treatment of
Parkinson's disease. The compound's clinical profile indicates that it is able
to stabilise the drug-induced motor function disturbances without causing
undesired inhibiting of the voluntary movement. 
-	NSD-644 is a selective triple monoamine reuptake inhibitor for the treatment
of pain and psychiatric disorders. Under the terms of the option agreement, GSK
has accepted NSD-644 as a CEEDD (Center of Excellence for External Drug
Discovery) candidate for further development, which means that GSK will pay
milestone payments to NeuroSearch up to and including the initiation of Phase I
studies. 
-	NSD-708 is an efficacious subtype selective GABA modulator for the treatment
of anxiety etc. GSK holds an option for NSD-708 within the framework of the
option agreement. 
-	NSD-788 is a selective monoamine reuptake inhibitor in development for the
treatment of anxiety and other psychiatric disorders. GSK holds an option for
NSD-788 within the framework of the option agreement. 
-	NSD-503 is a specific ion channel opener which has showed promising results
in the treatment of smokers' lungs. As previously announced, NeuroSearch is
conducting supplementary preclinical studies of another compound which is
expected to have a better therapeutic potential with a view to subsequently
selecting the most promising drug candidate. 
-	NSD-726 is a specific ion channel blocker which has been selected for
development for the treatment of autoimmune diseases. NSD-726 also falls within
the framework of the option agreement with GSK. 
-	NSD-721, an efficacious subtype selective GABA modulator for the treatment of
anxiety, epilepsy and pain, is the latest development candidate selected from
the company's drug discovery programmes. NSD-721 has demonstrated promising
results in several disease models, and GSK also holds an option for this drug
candidate. 
-	NSD-761 is a selective ion channel modulator, selected for development by the
end of August 2007. The compound has demonstrated promising effects in
preclinical models of cognitive dysfunction. GSK holds an option for NSD-761
within the framework of the GSK Agreement. 

For all drug candidates being developed under the alliance with GSK and under
the terms of the option agreement, the plan is that NeuroSearch will handle
development through Phase IIa with sizeable milestone payments from GSK
beginning from the start-up of Phase I. After Phase IIa, GSK will take over the
full operational and financial responsibility for the further development and
commercialisation of the products and pay sizeable milestones to NeuroSearch,
which may amount to a total of EUR 109 million until marketing, as well as
royalties on its global sales of the products. 

In general, NeuroSearch's preclinical development activities are progressing
very satisfactorily. 
Affiliates and other equity interests

NeuroSearch had equity interests in the following companies as of 30 September
2007: NeuroSearch Sweden AB (100%), NsExplorer A/S (100%); NeuroScreen ApS
(100%) and Poseidon Pharmaceuticals A/S (100%); Sophion Bioscience A/S (29.6%),
NsGene A/S (25.2%), Atonomics A/S (18.8%), ZGene A/S (17.7%), PainCeptor Pharma
Corporation Inc. (2.6%) and Bavarian Nordic A/S (1.3%) 
All the companies are based in Denmark with the exception of NeuroSearch Sweden
AB, which is based in Sweden, and PainCeptor Pharma Corporation Inc., which is
based in Canada. 

Associates
In Q3 2007, NeuroSearch has granted a convertible loan to Sophion Bioscience of
DKK 1.3 million. NeuroSearch has thus provided loans to Sophion Bioscience
totalling DKK 2.6 million including interest. The loans, on which no
instalments are paid, falls due on 30 June 2008. 
In Q3 2007, NeuroSearch has also granted subordinated convertible loans to
NsGene of DKK 4.0 million. NeuroSearch has thus provided loans to NsGene
totalling DKK 11.3 million including interest. The loans, on which no
instalments are paid, fall due on 28 February 2008. 

Other Investments
NeuroSearch holds 100,102 shares in Bavarian Nordic A/S (BAVA), equivalent to
1.3% of the share capital. As of 28 September the market value of the shares
was DKK 44.8 million based on the closing price of Bavarian Nordic's shares of
DKK 448 per share.  As of 27 November 2007, the value of NeuroSearch's interest
in Bavarian Nordic was DKK 32.0 million (DKK 320 per share). 

Organisation
NeuroSearch had 230 employees at 30 September 2007. The affiliated companies
had a total of 117 employees. 
As a result of the growth in its development activities and the growing number
of clinical studies of new drug candidates, NeuroSearch has decided to extend
its R&D facilities at Ballerup, Denmark by 800 square metres of new premises,
in order to meet the increased demand for facilities. The necessary building
permits and the environmental approval have been obtained, and construction is
expected to begin at the end of 2007 with scheduled completion in late 2008.
NeuroSearch has received a binding credit commitment for financing of the new
building. 


Outlook for 2007
NeuroSearch retains its guidance for the year ending 31 December 2007 of a loss
in the range of DKK 230-250 million before recognition of associates and other
equity interests, as was also stated in the offering circular dated 31 October
2007. 


Shareholder information
NeuroSearch completed a rights issue on 27 November 2007 of DKK 55,091,580
nominal value, equivalent to 2,754,579 new shares of DKK 20 nominal value each.
The new shares were subscribed at DKK 280 per share with total net proceeds to
NeuroSearch of DKK 728.7 million. Hereafter, the share capital of NeuroSearch
A/S amounts to a nominal value of DKK 303,995,000, equivalent to 15,199,750
shares. 
In continuation of the rights issue, ATP and ATP Invest have announced that
they have increased their share holding in NeuroSearch to a total of 1,603,517
shares with a nominal value of DKK 20 each, or a total nominal value of DKK
32,070,340. Hereafter, ATP and ATP Invest own a combined 10.55% share of the
share capital and the votes in NeuroSearch A/S. 
As soon as possible, NeuroSearch will convene an extraordinary general meeting
with a view to obtaining a new authorisation to the Board of Directors, during
the period ending on 31 December 2011, to increase the Company's share capital
with a total nominal sum of up to DKK 76,000,000 or 3,800,000 shares of a
nominal value of DKK 20 per share. The extraordinary general meeting will be
held on 10 December at 4.00 pm at NeuroSearch's address, Pederstrupvej 93,
DK-2750 Ballerup, Denmark. 

On 22 August 2007, NeuroSearch's Board of Directors resolved to issue up to
325,000 warrants to the members of the Board of Directors and the Executive
Management and the employees pursuant to article 5a of the Articles of
Association entitling the members of the Board of Directors, the Executive
Management as well as other employees to subscribe for shares with a total
nominal value of up to DKK 6,500,000. As a result of the completed capital
increase in NeuroSearch on 27 November the number of warrants have been
adjusted to 342,940, entitling the holders to subscribe for shares with a
nominal value of up to DKK 6,858,800.The allocation to the members of the Board
of Directors (14,777 warrants) and the Executive Management (63,331 warrants)
as well as the other employees (264.832 warrants) has now been completed. The
exercise price has been fixed at DKK 342 per warrant (DKK 361 before dilution).
The exercise periods are 22 November 2010 to 26 November 2010, 2 May 2011 to 6
May 2011 and 21 November 2011 to 25 November 2011. 


Proposal of President and CEO Thomas Hofman-Bang as a new board member
NeuroSearch's Board of Directors has decided to propose Thomas Hofman-Bang,
President and CEO of NKT Holding A/S, as a new member of the Board of
Directors. Thomas Hofman-Bang has more than 10 years' broadly based industrial
experience, including more than six years' experience from management positions
in Denmark and the US within business development, finance and strategy in
listed companies In addition, he holds a number of directorships in innovation
driven-companies and organisations. He is a state authorised public accountant
by education. NeuroSearch believes that Thomas Hofman-Bang has the right
competences to make him a valuable supplement to the existing Board of
Directors and which competences are important for the company's continuing
development and growth. The recommendation of Thomas Hofman-Bang as a new
member of the Board of Directors will be included in the notice of an
extraordinary general meeting. 

Shareholdings 
On 30 September 2007, the members of the Board of Directors, the Executive
Man¬agement and the employees held shares in the company as shown below: 


Shareholders	
Number of shares
	

Asger Aamund, Chairman	
637,952

Other Board members (6 persons)	
110,333

Executive Management (5 persons)	
64,604

Other employees	
168,788

Total 	
981,677(1)

(1)	Equivalent to 7.9% of the outstanding share capital of 12,445,171 shares at
30 September 2007. NeuroSearch does not hold any treasury shares. 


Warrants
As NeuroSearch completed a rights issue on 27 November 2007 with a nominal
value of DKK 55,091,580 at a price below the market value of the shares, the
Board of Directors decided, in accordance with NeuroSearch's Articles of
Association and the existing warrant programmes, to adjust the number of
warrants previously granted to NeuroSearch's employees and the exercise price
of the warrants. The adjustment was made to ensure that the value to the
employees of the warrants is retained following the capital increase. The
adjustment implies that the employees were granted a number of additional
warrants and that the exercise price was reduced. NeuroSearch does not hold any
treasury shares. 
 
The adjustment has resulted in the following changes to NeuroSearch's warrant
programmes: 

Year of warrant program-me	Exercise price before dilution	Exercise price after
dilution	Number of warrants before dilution	Number of warrants after dilution 
(rounded down)	Market value 1)
2004	262.19	248.39	146,134	154,172	17.0
2005	191.30	181.23	150,500	158,777	27.3
2006	213.51	202.27	11,709	12,359	1.9
2007-I	402.00	380.84	237,272	250,341	23.1
2007-II	361.00	342.00	325,000	342,940	40.0

1)	The market value has been determined in DKK million at the end of the
exercise period. The calculation was made using the Black & Scholes model,
applying an average market price at 27 November 2007 of DKK 328.10 per share
and a volatility rate of 40.6%, equivalent to the volatility of the price of
NeuroSearch's shares over the last three year before the balance sheet date.
Source: Danske Markets. 



Warrants granted in 2004, 2005, 2006 and 2007 as at 27 November 2007 (after
dilution) 



Year 	Exercise price, DKK	

Exercise period	
Board of Directors	Executive Manage-ment	
Other employees	Total 
(DKK 20 each)	
Market value(1)
2004 	248.39	Nov. 2007 
March 2008 
Sept. 2008 
March 2009 	7,416	25,334(2)	121,422(4)	154,172(4) 	17.0
2005 	181.23	Nov. 2008 
May 2009 
Nov. 2009 
March 2010 	7,416	28,672	122,689(4) 	158,777(4)	27.3
2006	202.27	Nov. 2008
May 2009
Nov. 2009
March 2010	0	0	12,359	12,359	1.9
2007-I	380.84	May 2010
Aug./Sept. 2010
March 2011	0	41,165(5)	209,176(4)	250,341(4)	23.1
2007-II	342.00	Nov. 2010
May 2011
Nov. 2011	14,777	63,331(6)	264,832(4)	342,940(4)	40.0
Total			29,609	158,502	730,478	918,589(3)	109.3

(1)	The market value has been determined in DKK million at the end of the
exercise period. The calculation was made using the Black & Scholes model,
applying an average market price at 27 November 2007 of DKK 328.10 per share
and a volatility rate of 40.6%, equivalent to the volatility of the price of
NeuroSearch's shares over the last three years before the balance sheet date.
Source: Danske Markets. 
(2)	The Executive Management was increased from four to five persons in 2004. 
(3)	The aggregate warrant programme corresponds to 6.0% of the current share
capital. 
(4)	Warrants to other employees have been determined as a net figure less those
of employees who are no longer with the company. 
(5)	The grant was made to the Executive Management consisting of four persons
as of 1 January 2007 (Flemming Pedersen, Jørgen Drejer, Frank Wätjen and Finn
Eggert Sørensen). 
(6)	The grant was made to the Executive Management consisting of five persons
as of 1 September 2007 (Flemming Pedersen, Jørgen Drejer, Frank Wätjen, Finn
Eggert Sørensen and Dieter Meier). 

FINANCIAL REVIEW
The interim report for Q3 2007 is presented in accordance with the recognition
and measurement requirements of IFRS as adopted by the EU and additional Danish
disclosure requirements for interim reports of listed companies. The accounting
policies are consistent with those applied in the annual report for 2006. The
interim report is unaudited. 
A loss after tax of DKK 222.9 million was posted for the nine months ended 30
September 2007 (a loss of DKK 132.2 million in the same period of 2006). The
comparative figures for the nine months ended 30 September 2006 do not include
NeuroSearch Sweden AB, which was acquired in Q4 2006. 
Capital resources totalled DKK 258.0 million at 30 September 2007 (DKK 287.1
million at 30 September 2006). 
Revenue for the period 1 January to 30 September 2007 was DKK 66.3 million, of
which guaranteed revenue from the partnership agreement with GSK accounted for
DKK 49.3 million. The remaining DKK 17 million was milestone payments from
Abbott in connection with the initiation of a Phase II clinical study in March
of the development candidate ABT-894 for the treatment of ADHD, and the
initiation of a Phase I clinical study in May of the development candidate
ABT-107 as well as a Phase I clinical study initiated in July of the
development candidate ABT-560 with a view to developing both for the treatment
of cognitive dysfunctions related to a number of CNS diseases. 
Costs totalled DKK 260.0 million (DKK 167.5 million in the same period of
2006), of which NeuroSearch Sweden accounted for DKK 49.2 million. Development
costs increased by DKK 59.6 million, of which DKK 30 million related to
increased activities in the development projects acquired in NeuroSearch
Sweden, including the acquired ACR16 development project (Huntington's
disease). In addition, costs increased by 14.0 million in the tesofensine
project (obesity/type 2 diabetes). The remaining DKK 15.6 million of costs
primarily related to NSD-644 (pain and psychiatric disorders), NSD-788
(anxiety) and other development projects. Research costs increased by DKK 25.4
million, of which DKK 16.0 million related to increased activity in the
acquired company NeuroSearch Sweden. The costs include DKK 13.1 million of
share-based compensation. This item has no cash flow effect. 
Other financials amounted to a net expense of DKK 9.6 million, down from a net
expense of DKK 3.9 million in H1 2006. Out of the DKK 9.6 million, interest on
mortgages on the company's property accounted for DKK 5.7 million and
amortisation of the consideration for NeuroSearch Sweden AB accounted for DKK
8.1 million. The amortisation has no cash flow effect. 
In accordance with IFRS3, an adjustment has been made of the value of deferred
tax relating to the acquisition of Carlsson Research (now NeuroSearch Sweden).
Deferred tax has been increased by DKK 36 million. Goodwill has been increased
by a corresponding amount, so the adjustment has no impact on the results of
operations for the period or equity. 
 
Financial highlights, per share ratios and movements in equity
The interim report for Q3 2007 is presented in accordance with the recognition
and measurement requirements of IFRS as adopted by the EU and additional Danish
disclosure requirements for interim reports of listed companies. The accounting
policies are consistent with those applied in the annual report for 2006. The
interim report is unaudited. 


Financial highlights (DKK million)		GROUP
		Q3 2007
(3 months)	Q3 2006
(3 months)	Q1-Q3 2007
(9 months)	Q1-Q3 2006
(9 months)	2006
(12 months)
Income statement:						
Revenue		22.0	16.3	68.9	49.3	66.3
Research costs		49.0	40.6	148.0	122.6	172.3
Development costs		33.0	7.8	88.3	28.7	54.8
Operating profit/(loss)		(65.8)	(35.2)	(191.1)	(118.2)	(186.7)
Net financials		(8.0)	1.5	(31.8)	(14.0)	(25.5)
Profit/(loss) before taxes		(73.8)	(33.7)	(222.9)	(132.2)	(212.2)
Net profit/(loss)		(73.8)	(33.7)	(222.9)	(132.2)	(212.2)
						
Balance sheet:						
Total assets				1,134.0	498.8	1,267.5
Cash and cash equivalents,
securities and investments				
198.1	
271.4	
387.0
Equity				440.2	272.3	657.7
						
Investments:						
Payments to acquire 
equipment		
6.9	
2.7	
10.5	
9.1	
12.9
						
Statement of cash flows:						
Cash flows from operating 
activities		
(76.9)	
(52.5)	
(165.5)	
(98.5)	
(166.4)
Cash flows from investing 
Activities		
78.3	
26.5	
147.5	
(1.3)	
(335.5)
Cash flows from financing
activities		
1.9	
(9.2)	
11.1	
(3.9)	
365.2
Cash and cash equivalents 
at end of period				
(14.5)	
34.1	
(7.2)
						
Other capital resources:						
Other investments, securities
and cash reserves				
272.5	
253.0	
510.8
Capital resources at end of 
period				
258.0	
287.1	
503.6
						
Per share ratios (DKK):						
Earnings per share
(EPS)* 		
(5.93)	
(4.25)	
(17.96)	
(16.71)	
(24.17)
Diluted earnings per share		(5.93)	(4.25)	(17.96)	(16.71)	(24.17)
Net asset value 				35.37	34.29	53.38
Market price at end of 
period				
387	
169	
321.5
Market price/net asset 
value				
10.94	
4.93	
6.02
						
Average number of 
employees, full-time 
equivalents				

229	

192	

199

* Per share of DKK 20 nominal value.
The ratios are stated in accordance with “Recommendations and Financial Ratios”
issued by the Danish Society of Financial Analysts. 


Statement of 
movements in equity
(DKK million)		
Share
capital		
Share
premium		Currency 
Translation
reserve		
Other
reserves		
Retained 
loss		

Total
												
Equity at 
1 January 2007		
246.4		
0		
5.1		
54.3		
351.9		
657.7
Other equity items		2.5		13.3		(5.2)		(17.8)		12.6		5.4
Net profit/(loss) for the 
period		
-		
-		
-		
-		
(222.9)		
(222.9)
Transfer		-		(13.3)		-		-		13.3		0
Equity at 
30 September 2007		
248.9		
0		
(0.1)		
36.5		
154.9		
440.2


Statement of 
movements in equity
(DKK million)		
Share
capital		
Share 
premium		Currency 
translation 
reserve		
Other 
reserves		
Retained 
loss		

Total
												
Equity at 
1 January 2006		
157.7		
0		
0		
43.3		
206.9		
407.9
Other equity items		1.1		8.4		-		-		-		9.5
Net profit/(loss) for the 
period		
-		
-		
-		
(12.9)		
(132.2)		
(145.1)
Equity at 
30 September 2006		
158.8		
8.4	
	
0		
30.4		
74.7		
272.3

 
MANAGEMENT'S STATEMENT 

The Board of Directors and Executive Management today considered and approved
the interim report for the period 1 January to 30 September 2007. 

The interim report, which is unaudited, is presented in accordance with the
recognition and measurement requirements of the International Financial
Reporting Standards as adopted by the EU and additional Danish interim
financial reporting requirements for listed companies. 

We consider the accounting policies to be appropriate to the effect that the
interim report gives a true and fair view of the Group's assets and
liabilities, financial position, results of operations and cash flows. 


Ballerup, 28 November 2007


Executive Management

Flemming Pedersen



Board of Directors

Asger Aamund

Marianne Philip

Allan Andersen

Jørgen Buus Lassen

Torbjörn Bjerke

Lars Siim Madsen

Torben Skov



 
Annex 1 - Condensed income statement

Income statement
(DKK million)		GROUP

				
		Q1-Q3 2007
(9 months)	Q1-Q3 2006
(9 months)	2006
(12 months)
				
Revenue		68.9	49.3	66.3
Research costs		148.0	122.6	172.3
Development costs		88.3	28.7	54.8
General and administrative costs		23.7	16.2	25.9
Total costs		260.0	167.5	253.0
Operating profit/(loss)		(191.1)	(118.2)	(186.7)
				
Share of profit/(loss) of associates		(14.3)	(10.1)	(20.7)
Value adjustment of securities		(7.9)	-	-
Net other financials		(9.6)	(3.9)	(4.8)
Taxes		-	-	-
Net profit/(loss)		(222.9)	(132.2)	(212.2)

 
Annex 2 - Condensed balance sheet and statement of cash flows

Balance sheet
(DKK million)		
GROUP

				
		Q1-Q3 2007
(9 months)	Q1-Q3 2006
(9 months)	2006
(12 months)
				
Intangible assets		726.6	8.7	657.8
Property, plant and equipment		168.7	165.1	169.7
Investments		25.2	37.9	29.7
Receivables		15.4	15.7	23.3
Cash and cash equivalents 
and securities		
198.1	
271.4	
387.0
Total assets		1,134.0	498.8	1,267.5
				
Equity		440.2	272.3	657.7
Non-current liabilities		306.9	126.7	435.7
Current liabilities 		386.9	99.8	174.1
Total equity and liabilities		1,134.0	498.8	1,267.5

Statement of cash flows
(DKK million)
				
Cash flows from operating activities		
(165.5)	
(98.5)	
(166.4)
Cash flows from investing activities		
147.5	
(1.3)	
(335.5)
Cash flows from financing activities		
11.1	
(3.9)	
365.2
Unrealised gain/(loss) on securities and value adjustment of cash and cash
equivalents		 

(0.4)	

0.3	

0
Net change in cash and cash 
equivalents for the period		
(7.3)	
(103.4)	
(136.7)
Cash and cash equivalents at beginning of period		(7.2)	137.5	129.5
Cash and cash equivalents at end of period		(14.5)	34.1	(7.2)
Other investments, securities 
cash reserves		
272.5	
253.0	
510.8
Capital resources at end of 
period		
258.0	
287.1	
503.6