##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2007
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number: 001-15281
 REPROS THERAPEUTICS INC.
  Delaware
    
    2408 Timberloch Place, Suite B-7
    
    76-0233274(State or other jurisdiction of
    
    The Woodlands, Texas 77380
    
    (IRS Employerincorporation or
    
    (Address of principal executive
    
    Identification No.)organization)
    
    offices and zip code)(281) 719-3400(Registrants telephone number,including area code)
 þ o
  o þ o
 o þ




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##### 



REPROS THERAPEUTICS INC.
   PageFACTORS AFFECTING FORWARD-LOOKING STATEMENTS
    
    
    3PART I. FINANCIAL INFORMATION
    
    
    4Item 1. Financial Statements (unaudited)Unaudited Condensed Consolidated Balance Sheets: September 30, 2007
and December 31, 2006
    
    
    5Unaudited Condensed Consolidated Statements of Operations:
    
    
    6For the three-months and nine-months ended September 30, 2007 and 2006 and
from Inception (August 20, 1987) through September 30, 2007Unaudited Condensed Consolidated Statements of Stockholders Equity
    
    
    7Unaudited Condensed Consolidated Statements of Cash Flows:
    
    
    8For the nine-months ended September 30, 2007 and 2006 and from Inception
(August 20, 1987) through September 30, 2007Notes to Unaudited Condensed Consolidated Financial Statements
    
    
    9Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    13Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    23Item 4. Controls and Procedures
    
    
    23PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    25Item 1A. Risk Factors
    
    
    25Item 5. Other Information
    
    
    26Item 6. Exhibits
    
    
    26SIGNATURES
    
    
    27Certification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 1350Certification of CFO Pursuant to Section 1350
  2




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FACTORS AFFECTING FORWARD-LOOKING STATEMENTS
  3




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PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
  4




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REPROS THERAPEUTICS INC. AND SUBSIDIARY
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 September 30,
    
    
    December 31,2007
    
    
    2006ASSETSCurrent AssetsCash and cash equivalents
    
    $
    2,815
    
    
    $
    1,136Marketable securities
    
    
    25,935
    
    
    
    5,600Prepaid expenses and other current assets
    
    
    508
    
    
    
    225Total current assets
    
    
    29,258
    
    
    
    6,961Fixed Assets,net
    
    
    50
    
    
    
    65Other Assets,net
    
    
    1,013
    
    
    
    823Total assets
    
    $
    30,321
    
    
    $
    7,849LIABILITIES AND STOCKHOLDERS EQUITYCurrent LiabilitiesAccounts payable
    
    $
    1,756
    
    
    $
    1,973Accrued expenses
    
    
    1,391
    
    
    
    2,086Total current liabilities
    
    
    3,147
    
    
    
    4,059Commitments and ContingenciesStockholders EquityUndesignated Preferred Stock, $.001 par value, 5,000,000
shares authorized, none issued and outstanding
    
    
    
    
    
    
    Common Stock, $.001 par value, 20,000,000 shares
authorized, 14,711,939 and 12,087,997 shares issued,
respectively; 12,774,904 and 10,150,962 shares
outstanding, respectively
    
    
    15
    
    
    
    12Additional paid-in capital
    
    
    151,839
    
    
    
    118,066Cost of treasury stock, 1,937,035 and 1,937,035 shares, respectively
    
    
    (5,948
    )
    
    
    (5,948
    )Deficit accumulated during the development stage
    
    
    (118,732
    )
    
    
    (108,340
    )Total stockholders equity
    
    
    27,174
    
    
    
    3,790Total liabilities and stockholders equity
    
    $
    30,321
    
    
    $
    7,849
  5




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REPROS THERAPEUTICS INC. AND SUBSIDIARY
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 From Inception(August 20, 1987)Three Months Ended
    
    
    Nine Months Ended
    
    
    throughSeptember 30,
    
    
    September 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    2007RevenuesLicensing fees
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    28,755Product royalties
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    627Research and development grants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,219Interest income
    
    
    396
    
    
    
    146
    
    
    
    1,155
    
    
    
    486
    
    
    
    15,507Gain on disposal of fixed assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    102Other income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35Total revenues and
other income
    
    
    396
    
    
    
    146
    
    
    
    1,155
    
    
    
    486
    
    
    
    46,245ExpensesResearch and development
    
    
    3,196
    
    
    
    3,073
    
    
    
    9,430
    
    
    
    7,245
    
    
    
    121,703General and administrative
    
    
    568
    
    
    
    713
    
    
    
    2,117
    
    
    
    1,989
    
    
    
    33,543Interest expense and amortization
of intangibles
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    388Total expenses
    
    
    3,764
    
    
    
    3,786
    
    
    
    11,547
    
    
    
    9,234
    
    
    
    155,634Loss from continuing operations
    
    
    (3,368
    )
    
    
    (3,640
    )
    
    
    (10,392
    )
    
    
    (8,748
    )
    
    
    (109,389
    )Loss from discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,828
    )Gain on disposal of discontinued operation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    939Net loss before cumulative effect of
change in accounting principle
    
    
    (3,368
    )
    
    
    (3,640
    )
    
    
    (10,392
    )
    
    
    (8,748
    )
    
    
    (110,278
    )Cumulative effect of change in accounting
principle
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,454
    )Net loss
    
    $
    (3,368
    )
    
    $
    (3,640
    )
    
    $
    (10,392
    )
    
    $
    (8,748
    )
    
    $
    (118,732
    )Loss per share  basic and diluted:
    
    $
    (0.26
    )
    
    $
    (0.36
    )
    
    $
    (0.84
    )
    
    $
    (0.86
    )Weighted average shares used in loss per share calculation:Basic
    
    
    12,775
    
    
    
    10,150
    
    
    
    12,439
    
    
    
    10,145Diluted
    
    
    12,775
    
    
    
    10,150
    
    
    
    12,439
    
    
    
    10,145
  6




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Repros Therapeutics, Inc.
 
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
 DeficitAccumulatedAdditional
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    During the
    
    
    TotalPreferred Stock
    
    
    Common Stock
    
    
    Paid-in
    
    
    Deferred
    
    
    Treasury Stock
    
    
    Development
    
    
    StockholdersShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    Compensation
    
    
    Shares
    
    
    Amount
    
    
    Stage
    
    
    EquityBalance at December 31, 2006
    
    
    
    
    
    $
    
    
    
    
    12,087,997
    
    
    $
    12
    
    
    $
    118,066
    
    
    $
    
    
    
    
    1,937,035
    
    
    $
    (5,948
    )
    
    $
    (108,340
    )
    
    $
    3,790Exercise of options to purchase common stock
for cash, January and April @ $2.40 & $8.00 per share
    
    
    
    
    
    
    
    
    
    
    13,942
    
    
    
    
    
    
    
    37
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    37Issuance of 2,610,000 shares of common stock at $13.75
per share February 5, 2007
    
    
    
    
    
    
    
    
    
    
    2,610,000
    
    
    
    3
    
    
    
    33,552
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33,555Offering Costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (502
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (502
    )FAS 123(R) stock option compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    686
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    686Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,392
    )
    
    
    (10,392
    )
    
    
    $
    
    
    
    
    14,711,939
    
    
    $
    15
    
    
    $
    151,839
    
    
    $
    
    
    
    
    1,937,035
    
    
    $
    (5,948
    )
    
    $
    (118,732
    )
    
    $
    27,174
  7




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REPROS THERAPEUTICS INC. AND SUBSIDIARY
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 From Inception(August 20, 1987)Nine Months Ended
    
    
    throughSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007Cash Flows from Operating ActivitiesNet loss
    
    $
    (10,392
    )
    
    $
    (8,748
    )
    
    
    (118,732
    )Gain on disposal of discontinued operations
    
    
    
    
    
    
    
    
    
    
    (939
    )Gain on disposal of assets
    
    
    
    
    
    
    
    
    
    
    (102
    )Adjustments to reconcile net loss to net cash
used in operating activities:Noncash financing costs
    
    
    
    
    
    
    
    
    
    
    316Noncash inventory impairment
    
    
    
    
    
    
    
    
    
    
    4,417Noncash patent impairment
    
    
    
    
    
    
    
    
    
    
    1,339Noncash decrease in accounts payable
    
    
    
    
    
    
    
    
    
    
    (1,308
    )Depreciation and amortization
    
    
    25
    
    
    
    12
    
    
    
    3,823Noncash expenses related to stock-based
transactions
    
    
    686
    
    
    
    570
    
    
    
    4,292Common stock issued for agreement not to compete
    
    
    
    
    
    
    
    
    
    
    200Series B Preferred Stock issued for consulting
services
    
    
    
    
    
    
    
    
    
    
    18Sales and maturities of marketable securities
    
    
    26,810
    
    
    
    29,957
    
    
    
    84,792Purchases of marketable securities
    
    
    (47,145
    )
    
    
    (23,040
    )
    
    
    (82,192
    )Changes in operating assets and liabilities(net effects of purchase of businesses in 1988 and 1994):Decrease (increase) in receivables
    
    
    
    
    
    
    
    
    
    
    (199
    )Decrease (increase) in inventory
    
    
    
    
    
    
    
    
    
    
    (4,447
    )Decrease (increase) in prepaid expenses and other
current assets
    
    
    (284
    )
    
    
    (26
    )
    
    
    (210
    )(Decrease) increase in accounts payable and
accrued expenses
    
    
    (912
    )
    
    
    1,184
    
    
    
    4,343Net cash provided by (used in) operating activities
    
    
    (31,212
    )
    
    
    (91
    )
    
    
    (104,589
    )Cash Flows from Investing ActivitiesMaturities (purchases) of marketable securities
    
    
    
    
    
    
    
    
    
    
    (28,723
    )Capital expenditures
    
    
    (3
    )
    
    
    (62
    )
    
    
    (2,364
    )Purchase of technology rights and other assets
    
    
    (196
    )
    
    
    (136
    )
    
    
    (3,040
    )Proceeds from sale of PP&E
    
    
    
    
    
    
    
    
    
    
    225Cash acquired in purchase of FTI
    
    
    
    
    
    
    
    
    
    
    3Proceeds from sale of subsidiary, less
$12,345 for operating losses during
1990 phase-out period
    
    
    
    
    
    
    
    
    
    
    138Proceeds from sale of the assets of FTI
    
    
    
    
    
    
    
    
    
    
    2,250Increase in net assets held for disposal
    
    
    
    
    
    
    
    
    
    
    (213
    )Net cash used in investing activities
    
    
    (199
    )
    
    
    (198
    )
    
    
    (31,724
    )Cash Flows from Financing ActivitiesProceeds from issuance of common stock, net of
offering costs
    
    
    33,053
    
    
    
    
    
    
    
    135,457(Increase) decrease in prepaid offering costs
    
    
    
    
    
    
    
    
    
    
    Exercise of stock options
    
    
    37
    
    
    
    241
    
    
    
    363Proceeds from issuance of preferred stock
    
    
    
    
    
    
    
    
    
    
    23,688Purchase of treasury stock
    
    
    
    
    
    
    
    
    
    
    (21,487
    )Proceeds from issuance of notes payable
    
    
    
    
    
    
    
    
    
    
    2,839Principal payments on notes payable
    
    
    
    
    
    
    
    
    
    
    (1,732
    )Net cash provided by (used by) financing activities
    
    
    33,090
    
    
    
    241
    
    
    
    139,128Net increase (decrease) in cash and cash equivalents
    
    
    1,679
    
    
    
    (48
    )
    
    
    2,815Cash and cash equivalents at beginning of period
    
    
    1,136
    
    
    
    2,165
    
    
    
    Cash and cash equivalents at end of period
    
    $
    2,815
    
    
    $
    2,117
    
    
    $
    2,815
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REPROS THERAPEUTICS INC. AND SUBSIDIARY
  
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2007
 NOTE 1  Organization, Operations and Liquidity
 ®
     9




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Recent Accounting Pronouncements
   NOTE 2  Marketable Securities
   10




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September 30, 2007
    
    
    December 31, 2006Corporate Bonds
    
    $
    11,032
    
    
    $
    Certificates of Deposit
    
    
    5,503
    
    
    
    900Taxable Auction Securities
    
    
    5,265
    
    
    
    4,550Medium and Short Term Notes
    
    
    3,137
    
    
    
    Euro Dollar Bonds
    
    
    998
    
    
    
    150Total
    
    $
    25,935
    
    
    $
    5,600
 NOTE 3  Patents
  NOTE 4  Accrued Expenses
  September 30, 2007
    
    
    December 31, 2006Research and development costs
    
    $
    1,113
    
    
    $
    1,686Payroll
    
    
    
    
    
    
    123Patent Costs
    
    
    40
    
    
    
    127Other
    
    
    238
    
    
    
    150Total
    
    $
    1,391
    
    
    $
    2,086
 NOTE 5  Loss Per Share
  11




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Three Months Ended Sept. 30,
    
    Nine Months Ended Sept. 30,2007
    
    2006
    
    2007
    
    2006Net Loss
    
    $
    (3,368
    )
    
    $
    (3,640
    )
    
    $
    (10,392
    )
    
    $
    (8,748
    )Average common shares
outstanding
    
    
    12,775
    
    
    
    10,150
    
    
    
    12,439
    
    
    
    10,145Basic and diluted loss per share
    
    $
    (0.26
    )
    
    $
    (0.36
    )
    
    $
    (0.84
    )
    
    $
    (0.86
    )
  NOTE 6  Stockholders Equity
   NOTE 7  Commitments and Contingencies
  NOTE 8
 Subsequent Event
  12




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 The following discussion contains 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. Such statements reflect the Companys current views with respect to future events and
financial performance and are subject to certain risks, uncertainties and assumptions. Should one
or more of these risks or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those anticipated in such forward-looking
statements. The following discussion of financial condition should be read in conjunction with the
accompanying consolidated financial statements and related notes.
 Overview
 ®
     13




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14




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15




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Estimate of Completion ofCurrent Phase of
    
    Current Phase and FutureProduct Candidate
    
    Indication
    
    Development
    
    Clinical Development(1)Proellex
    
    -Uterine fibroids
    
    -U.S. Phase 2 clinical trial
(3-month study) data reported
(2Q2007)
    
    -FDA end of Phase 2 meeting is
scheduled for November 30, 2007-U.S. Open Label Safety Study
(12-month)
    
    -Ongoing U.S. Open Label Safety Study
(33 patients as of October 2007),
interim extension data anticipated
(1Q2008)-Initiate proposed U.S. Phase 3
pivotal trial pending November 30,
2007, FDA meeting outcome (1H2008)-Submit Proellex proposed NDA for
uterine fibroids (2H2009)-Anemia associated
with uterine fibroids
    
    -Begin to conduct clinical trials
pending outcome of November 30,
2007, FDA meeting
    
    -Initiate Phase 3 studies pending
outcome of November 30, 2007, FDA
meeting (1H2008)-Submit proposed Proellex NDA for
anemia (YE2008)-Endometriosis
    
    -European Phase 1/2 clinical trial
(6-month study) - top-line data
reported (2Q2007)
    
    -Initiated 75 patient U.S. Phase 2
clinical trial (3Q2007)
-Initiate proposed Phase 3 trials in
(2H2008)-Submit Proellex proposed NDA for
endometriosis (YE2009)
 16




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Estimate of Completion ofCurrent Phase of
    
    Current Phase and FutureProduct Candidate
    
    Indication
    
    Development
    
    Clinical Development(1)Androxal
    
    -Male Secondary
Hypogonadism
    
    -We are no longer seeking this
indication in the U.S. in lieu of
AIHH and fertility
described below but will continue
to seek this indication in
non-U.S. markets
    
    -FDA Type C meeting held October 15,
2007-Non-pivotal U.S. Phase 3 (6-month
study) top-line data reported
(2Q2007)-U.S. Open Label Safety Study
(12-month)
    
    -Ongoing U.S. Open Label Safety Study
(79 patients as of October 2007)AIHH and concomitant glycemic and
lipid elevations
    
    -Submit White Paper to FDA then
begin Phase 2b clinical trial in
men with AIHH
    
    -Conduct Phase 2b clinical trial
(1H2008)-Initiate proposed U.S. Phase 3
pivotal trials pending positive
results from AIHH
Phase 2b trial and FDA acceptance of
clinical protocols (1H2009)-Male Secondary
Hypogonadism and
preservation of
fertility
    
    -Submit White Paper to FDA then
begin Phase 2b clinical trial
showing improvement and
maintenance of fertility and
sperm count in hypogonadal men
    
    -Conduct Phase 2b clinical trial
(1H2008)-Initiate proposed U.S. Phase 3
pivotal trials pending positive
results from fertility Phase 2b trial
and FDA acceptance of clinical
protocols (1H2009)
 17




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(1)
    
    The information in the column labeled Estimate of Completion of Current Phase and Future
Clinical Development contains forward-looking statements regarding timing of completion of
product development phases. The successful development of our product candidates is highly
uncertain. Estimated completion dates and expenses can vary significantly for each product
candidate and are difficult to predict. The actual timing of completion of those phases could
differ materially from the estimates provided in the table. We currently have no
collaborators on the development of any of our product candidates.     18




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19




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Recent Accounting Pronouncements
   20




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Results of Operations
 Three-Month and Nine-Month Periods Ended September 30, 2007 and 2006
  Revenues and other income
  Research and Development Expenses
 General and Administrative Expenses
 21




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Liquidity and Capital Resources
     22




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Item 3. Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4. Controls and Procedures
  23




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24




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PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
     
    
    demonstrating sufficient safety and efficacy in past clinical trials to obtain
regulatory approval to commence a further clinical trial;
    
    reaching agreements on acceptable terms with prospective contract manufacturers for
manufacturing sufficient quantities of a product candidate; and
    
    obtaining institutional review board approval to conduct a clinical trial at a
prospective site.
  25




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Item 5. Other Information
  
 Item 6. Exhibits
 31.1*
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer).31.2*
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer).32.1*
    
    Certification furnished pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer).32.2*
    
    Certification furnished pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer).
 
 *
    
    Filed herewith. 26




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SIGNATURES
  REPROS THERAPEUTICS INC.Date: November 9, 2007
    By:
    /s/ Joseph S. PodolskiJoseph S. PodolskiPresident, Chief Executive Officer and Director
(Principal Executive Officer)Date:  November 9, 2007
    By:
    /s/ Louis Ploth, Jr.Louis Ploth, Jr.Vice President Business Development,
Chief Financial Officer, Director and Secretary
(Principal Financial and Accounting Officer) 27




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##### Table of Contents



Exhibit Index
 31.1*
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer).31.2*
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer).32.1*
    
    Certification furnished pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer).32.2*
    
    Certification furnished pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer).
 
 *
    
    Filed herewith. 28