##### 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 June 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
(State or other jurisdiction of 
incorporation or 
organization)
    
    2408 Timberloch Place, Suite B-7
The Woodlands, Texas 77380
(Address of principal executive
offices and zip code)
    
    76-0233274
(IRS Employer
Identification No.)
  
 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: June 30, 2007 and December 31, 2006
    
    
    5Unaudited Condensed Consolidated Statements of Operations:
    
    
    6For the three-months and six-months ended June 30, 2007 and 2006 and from Inception (August 20, 1987) through June 30, 2007Unaudited Condensed Consolidated Statements of Cash Flows:
    
    
    7For the six-months ended June 30, 2007 and 2006 and from Inception (August 20, 1987) through June 30, 2007Notes to Unaudited Condensed Consolidated Financial Statements
    
    
    8Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    12Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    20Item 4.
    
    Controls and Procedures
    
    
    20PART II.
    
    OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    22Item 1A.
    
    Risk Factors
    
    
    22Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    22Item 5.
    
    Other Information
    
    
    22Item 6.
    
    Exhibits
    
    
    23SIGNATURES
    
    
    
    
    24Certification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906
  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
 June 30,
    
    
    December 31,2007
    
    
    2006ASSETSCurrent AssetsCash and cash equivalents
    
    $
    7,872
    
    
    $
    1,136Marketable securities
    
    
    23,945
    
    
    
    5,600Prepaid expenses and other current assets
    
    
    555
    
    
    
    225Total current assets
    
    
    32,372
    
    
    
    6,961Fixed Assets,net
    
    
    56
    
    
    
    65Other assets,net
    
    
    938
    
    
    
    823Total assets
    
    $
    33,366
    
    
    $
    7,849LIABILITIES AND STOCKHOLDERS EQUITYCurrent LiabilitiesAccounts payable
    
    $
    1,927
    
    
    $
    1,973Accrued expenses
    
    
    1,097
    
    
    
    2,086Total current liabilities
    
    
    3,024
    
    
    
    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
    
    
    151,640
    
    
    
    118,066Cost of treasury stock, 1,937,035 and 1,937,035 shares, respectively
    
    
    (5,948
    )
    
    
    (5,948
    )Deficit accumulated during the development stage
    
    
    (115,365
    )
    
    
    (108,340
    )Total stockholders equity
    
    
    30,342
    
    
    
    3,790Total liabilities and stockholders equity
    
    $
    33,366
    
    
    $
    7,849
  5




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REPROS THERAPEUTICS INC. AND SUBSIDIARY
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 From Inception(August 20, 1987)throughThree Months Ended June 30,
    
    
    Six Months Ended June 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    2007RevenuesLicensing fees
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    28,755Product royalties
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    627Research and development grants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,219Interest income
    
    
    442
    
    
    
    166
    
    
    
    759
    
    
    
    340
    
    
    
    15,111Gain on disposal of fixed assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    102Other Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35Total revenues and
other income
    
    
    442
    
    
    
    166
    
    
    
    759
    
    
    
    340
    
    
       
    45,849ExpensesResearch and development
    
    
    3,207
    
    
    
    2,363
    
    
    
    6,235
    
    
    
    4,171
    
    
    
    118,508General and administrative
    
    
    609
    
    
    
    666
    
    
    
    1,549
    
    
    
    1,276
    
    
    
    32,975Interest expense and amortization
of intangibles
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    388Total expenses
    
    
    3,816
    
    
    
    3,029
    
    
    
    7,784
    
    
    
    5,447
    
    
    
    151,871Loss from continuing operations
    
    
    (3,374
    )
    
    
    (2,863
    )
    
    
    (7,025
    )
    
    
    (5,107
    )
    
    
    (106,022
    )Loss from discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,828
    )Gain on disposal of discontinued operation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    939Net loss before cumulative effect of
change in accounting principle
    
    
    (3,374
    )
    
    
    (2,863
    )
    
    
    (7,025
    )
    
    
    (5,107
    )
    
    
    (106,911
    )Cumulative effect of change in accounting
principle
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,454
    )Net loss
    
    $
    (3,374
    )
    
    $
    (2,863
    )
    
    $
    (7,025
    )
    
    $
    (5,107
    )
    
    $
    (115,365
    )Loss per share  basic and diluted:
    
    $
    (0.26
    )
    
    $
    (0.28
    )
    
    $
    (0.57
    )
    
    $
    (0.50
    )Weighted average shares used in loss per share calculation:Basic
    
    
    12,775
    
    
    
    10,146
    
    
    
    12,268
    
    
    
    10,143Diluted
    
    
    12,775
    
    
    
    10,146
    
    
    
    12,268
    
    
    
    10,143
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REPROS THERAPEUTICS INC. AND SUBSIDIARY
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 From Inception(August 20, 1987)throughSix Months Ended June 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007Cash Flows from Operating ActivitiesNet loss
    
    $
    (7,025
    )
    
    $
    (5,107
    )
    
    
    (115,365
    )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
    
    
    16
    
    
    
    6
    
    
    
    3,814Noncash expenses related to stock-based
transactions
    
    
    487
    
    
    
    351
    
    
    
    4,093Common stock issued for agreement not to
compete
    
    
    
    
    
    
    
    
    
    
    200Series B Preferred Stock issued for consulting
services
    
    
    
    
    
    
    
    
    
    
    18Sales and maturities of marketable securities
    
    
    18,060
    
    
    
    22,107
    
    
    
    76,042Purchases of marketable securities
    
    
    (36,405
    )
    
    
    (18,475
    )
    
    
    (71,452
    )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
    
    
    (330
    )
    
    
    (106
    )
    
    
    (256
    )(Decrease) increase in accounts payable and
accrued expenses
    
    
    (1,036
    )
    
    
    477
    
    
    
    4,219Net cash provided by (used in) operating activities
    
    
    (26,233
    )
    
    
    (747
    )
    
    
    (99,610
    )Cash Flows from Investing ActivitiesMaturities (purchases) of marketable securities
    
    
    
    
    
    
    
    
    
    
    (28,723
    )Capital expenditures
    
    
    (3
    )
    
    
    (60
    )
    
    
    (2,364
    )Purchase of technology rights and other assets
    
    
    (118
    )
    
    
    (87
    )
    
    
    (2,962
    )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
    
    
    (121
    )
    
    
    (147
    )
    
    
    (31,646
    )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
    
    
    
    203
    
    
    
    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
    
    
    
    203
    
    
    
    139,128Net increase (decrease) in cash and cash equivalents
    
    
    6,736
    
    
    
    (691
    )
    
    
    7,872Cash and cash equivalents at beginning of period
    
    
    1,136
    
    
    
    2,165
    
    
    
    Cash and cash equivalents at end of period
    
    $
    7,872
    
    
    $
    1,474
    
    
    $
    7,872
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REPROS THERAPEUTICS INC. AND SUBSIDIARY
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2007
 NOTE 1  Organization, Operations and Liquidity
       8




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Recent Accounting Pronouncements
    9




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NOTE 2  Marketable Securities
   NOTE 3  Patents
  NOTE 4  Accrued Expenses
 Accrued expenses consist of the following (in thousands):
 June 30, 2007
    
    
    December 31, 2006Research and development costs
    
    $
    821
    
    
    $
    1,686Payroll
    
    
    
    
    
    
    123Patent Costs
    
    
    40
    
    
    
    127Other
    
    
    236
    
    
    
    150Total
    
    $
    1,097
    
    
    $
    2,086
 NOTE 5  Loss Per Share
   10




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Three Months Ended June 30,
    
    
    Six Months Ended June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net Loss
    
    $
    (3,374
    )
    
    $
    (2,863
    )
    
    $
    (7,025
    )
    
    $
    (5,107
    )Average common shares
outstanding
    
    
    12,775
    
    
    
    10,146
    
    
    
    12,268
    
    
    
    10,143Basic loss per share
    
    $
    (0.26
    )
    
    $
    (0.28
    )
    
    $
    (0.57
    )
    
    $
    (0.50
    )Diluted loss per share
    
    $
    (0.26
    )
    
    $
    (0.28
    )
    
    $
    (0.57
    )
    
    $
    (0.50
    )
  NOTE 6  Stockholders Equity
   NOTE 7  Commitments and Contingencies
  11




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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
       12




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®
   13




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Estimate of Completion ofProduct
    
    
    
    Current Phase of
    
    Current Phase and FutureCandidate
    
    Indication
    
    Development
    
    Clinical Development(1)Proellex
    
    -Uterine fibroids
    
    -U.S. Phase 2 clinical trial
(3-month)
    
    -Reported U.S. Phase 2
data (2Q2007)-U.S. Open Label
Safety Study
(12-month)
    
    -Currently 41 patients
enrolled (July 2007),
One year interim
extension data
anticipated (4Q2007)-Initiate proposed U.S.
Phase 3 pivotal trial
(YE2007)-Submit Proellex NDA for
uterine fibroids end of
2008-Endometriosis
    
    -European Phase 1/2
clinical trial (6-month)
    
    -Reported top-line Phase
1/2 data (2Q2007),-Initiate proposed U.S.
Phase 2 clinical trial
(3Q2007)Androxal
    
    -Male Secondary
Hypogonadism
    
    Non-pivotal U.S.
Phase 3 (6-month)
    
    -Reported top-line Phase
3 data (2Q2007)-U.S. Open Label
Safety Study (12-month)
    
    -Currently 90 patients
enrolled (July 2007)-Initiate proposed U.S.
Phase 3 pivotal trial
(4Q2007)-Submit Androxal NDA end
of 2008
 
 (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 R&D 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.  14




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15




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16




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Recent Accounting Pronouncements
   17




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Results of Operations
 Three-Month and Six-Month Periods Ended June 30, 2007 and 2006
  Revenues and other income
  Research and Development Expenses
 18




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General and Administrative Expenses
 Liquidity and Capital Resources
    19




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Item 3. Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4. Controls and Procedures
  20




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21




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PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 4. Submission of Matters to a Vote of Security Holders
   For
    
    WithheldJoseph S. Podolski
    
    
    10,134,999
    
    
    
    49,752Louis Ploth, Jr.
    
    
    9,263,493
    
    
    
    921,258Daniel F. Cain
    
    
    10,152,391
    
    
    
    32,360Jean Fourcroy, M.D., Ph.D., M.P.H.
    
    
    10,150,683
    
    
    
    34,068Jeffrey R. Harder, J.D.
    
    
    9,128,325
    
    
    
    1,056,426Nola Masterson .
    
    
    10,133,476
    
    
    
    51,275David Poorvin, Ph.D.
    
    
    10,151,533
    
    
    
    33,218
     
 Item 5. Other Information
  22




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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.**
    
    Portions of this exhibit have been omitted based on a request for confidential treatment
pursuant to Rule 24b-2 of the Exchange Act. Such omitted portions have been filed separately with
the Commission. 23




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SIGNATURES
  REPROS THERAPEUTICS INC.
  By:
    /s/ Joseph S. PodolskiJoseph S. PodolskiPresident, Chief Executive Officer and Director
(Principal Executive Officer)  By:
    /s/ Louis Ploth, Jr.Louis Ploth, Jr.Vice President Business Development, Chief
Financial Officer, Director and Secretary
(Principal Financial and Accounting Officer) 24




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Exhibit Index
 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.**
    
    Portions of this exhibit have been omitted based on a request for confidential treatment
pursuant to Rule 24b-2 of the Exchange Act. Such omitted portions have been filed separately with
the Commission. 25