##### 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 March 31, 2007
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the transition period fromto
 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




---



##### 



REPROS THERAPEUTICS INC.
   PageFACTORS AFFECTING FORWARD-LOOKING STATEMENTS
    
    
    3PART I.
    
    FINANCIAL INFORMATION
    
    
    4Item 1.
    
    Financial Statements (unaudited)Unaudited Condensed Consolidated Balance Sheets: March 31, 2007
and December 31, 2006
    
    
    5Unaudited Condensed Consolidated Statements of Operations:
For the three-months ended March 31, 2007 and 2006 and
from Inception (August 20, 1987) through March 31, 2007
    
    
    6Unaudited Condensed Consolidated Statements of Cash Flows:
For the three-months ended March 31, 2007 and 2006 and from Inception
(August 20, 1987) through March 31, 2007
    
    
    7Notes 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
    
    
    19Item 4.
    
    Controls and Procedures
    
    
    19PART II.
    
    OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    20Item 1A.
    
    Risk Factors
    
    
    20Item 5.
    
    Other Information
    
    
    20Item 6.
    
    Exhibits
    
    
    20SIGNATURES
    
    
    
    
    22Certification 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




---



##### Table of Contents



FACTORS AFFECTING FORWARD-LOOKING STATEMENTS
  3




---



##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
  4




---



##### Table of Contents



REPROS THERAPEUTICS INC. AND SUBSIDIARY
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
  March 31,
    
    
    December 31,2007
    
    
    2006ASSETSCurrent AssetsCash and cash equivalents
    
    $
    4,592
    
    
    $
    1,136Marketable securities
    
    
    31,033
    
    
    
    5,600Prepaid expenses and other current assets
    
    
    383
    
    
    
    225Total current assets
    
    
    36,008
    
    
    
    6,961Fixed assets,net
    
    
    61
    
    
    
    65Other assets,net
    
    
    912
    
    
    
    823Total assets
    
    $
    36,981
    
    
    $
    7,849LIABILITIES AND STOCKHOLDERS EQUITYCurrent LiabilitiesAccounts payable
    
    $
    1,704
    
    
    $
    1,973Accrued expenses
    
    
    1,773
    
    
    
    2,086Total current liabilities
    
    
    3,477
    
    
    
    4,059Commitments & 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, 14,711,330 and 12,087,997 shares issued,
respectively, 12,774,295 and 10,150,962 shares
outstanding, respectively
    
    
    15
    
    
    
    12Additional paid-in capital
    
    
    151,428
    
    
    
    118,066Cost of treasury stock, 1,937,035 and 1,937,035 shares, respectively
    
    
    (5,948
    )
    
    
    (5,948
    )Deficit accumulated during the development stage
    
    
    (111,991
    )
    
    
    (108,340
    )Total stockholders equity
    
    
    33,504
    
    
    
    3,790Total liabilities and stockholders equity
    
    $
    36,981
    
    
    $
    7,849
  5




---



##### Table of Contents



REPROS THERAPEUTICS INC. AND SUBSIDIARY
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
  From Inception(August 20, 1987)throughThree Months Ended March 31,
    
    
    March 31,2007
    
    
    2006
    
    
    2007Revenues and other incomeLicensing fees
    
    $
    
    
    
    $
    
    
    
    $
    28,755Product royalties
    
    
    
    
    
    
    
    
    
    
    627Research and development grants
    
    
    
    
    
    
    
    
    
    
    1,219Interest income
    
    
    318
    
    
    
    174
    
    
    
    14,670Gain on disposal of fixed assets
    
    
    
    
    
    
    
    
    
    
    102Other Income
    
    
    
    
    
    
    
    
    
    
    35Total revenues and other income
    
    
    318
    
    
    
    174
    
    
    
    45,408ExpensesResearch and development
    
    
    3,028
    
    
    
    1,808
    
    
    
    115,301General and administrative
    
    
    941
    
    
    
    610
    
    
    
    32,367Interest expense and amortization
of intangibles
    
    
    
    
    
    
    
    
    
    
    388Total expenses
    
    
    3,969
    
    
    
    2,418
    
    
    
    148,056Loss from continuing operations
    
    
    (3,651
    )
    
    
    (2,244
    )
    
    
    (102,648
    )Loss from discontinued operations
    
    
    
    
    
    
    
    
    
    
    (1,828
    )Gain on disposal of discontinued operation
    
    
    
    
    
    
    
    
    
    
    939Net loss before cumulative effect of
change in accounting principle
    
    
    (3,651
    )
    
    
    (2,244
    )
    
    
    (103,537
    )Cumulative effect of change in accounting
principle
    
    
    
    
    
    
    
    
    
    
    (8,454
    )Net loss
    
    $
    (3,651
    )
    
    $
    (2,244
    )
    
    $
    (111,991
    )Loss per share  basic and diluted
    
    $
    (0.31
    )
    
    $
    (0.22
    )Weighted average shares used in loss per share calculation:Basic
    
    
    11,756
    
    
    
    10,140Diluted
    
    
    11,756
    
    
    
    10,140
  6




---



##### Table of Contents



REPROS THERAPEUTICS INC. AND SUBSIDIARY
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
  From Inception(August 20, 1987)throughThree Months Ended March 31,
    
    
    March 31,2007
    
    
    2006
    
    
    2007Cash Flows from Operating ActivitiesNet loss
    
    $
    (3,651
    )
    
    $
    (2,244
    )
    
    $
    (111,991
    )Gain on disposal of discontinued operations
    
    
    
    
    
    
    
    
    
    
    (939
    )Gain on disposal of fixed 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
    
    
    8
    
    
    
    
    
    
    
    3,806Noncash expenses related to stock-based
transactions
    
    
    294
    
    
    
    156
    
    
    
    3,900Common stock issued for agreement not to
compete
    
    
    
    
    
    
    
    
    
    
    200Series B Preferred Stock issued for consulting
services
    
    
    
    
    
    
    
    
    
    
    18Sales and maturities of marketable securities
    
    
    4,450
    
    
    
    14,112
    
    
    
    62,432Purchases of marketable securities
    
    
    (29,883
    )
    
    
    (9,801
    )
    
    
    (64,930
    )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
    
    
    (159
    )
    
    
    34
    
    
    
    (85
    )(Decrease) increase in accounts payable and
accrued expenses
    
    
    (582
    )
    
    
    45
    
    
    
    4,673Net cash provided by (used in) operating activities
    
    
    (29,523
    )
    
    
    2,302
    
    
    
    (102,900
    )Cash Flows from Investing ActivitiesMaturities (purchases) of marketable securities
    
    
    
    
    
    
    
    
    
    
    (28,723
    )Capital expenditures
    
    
    (2
    )
    
    
    (45
    )
    
    
    (2,363
    )Purchase of technology rights and other assets
    
    
    (90
    )
    
    
    (38
    )
    
    
    (2,934
    )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
    
    
    (92
    )
    
    
    (83
    )
    
    
    (31,617
    )Cash Flows from Financing ActivitiesProceeds from issuance of common stock, net of
offering costs
    
    
    33,039
    
    
    
    
    
    
    
    135,443(Increase) decrease in prepaid offering costs
    
    
    
    
    
    
    
    
    
    
    Exercise of stock options
    
    
    32
    
    
    
    203
    
    
    
    358Proceeds 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 in) financing activities
    
    
    33,071
    
    
    
    203
    
    
    
    139,109Net increase (decrease) in cash and cash equivalents
    
    
    3,456
    
    
    
    2,422
    
    
    
    4,592Cash and cash equivalents at beginning of period
    
    
    1,136
    
    
    
    2,165
    
    
    
    Cash and cash equivalents at end of period
    
    $
    4,592
    
    
    $
    4,587
    
    
    $
    4,592
  7




---



##### Table of Contents



REPROS THERAPEUTICS INC. AND SUBSIDIARY
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2007
 NOTE 1    Organization, Operations and Liquidity
       8




---



##### Table of Contents



Recent Accounting Pronouncements
     9




---



##### Table of Contents



NOTE 2    Marketable Securities
   NOTE 3    Patents
  NOTE 4    Loss Per Share
   Three Months Ended March 31,2007
    
    
    2006Net Loss
    
    $
    (3,651
    )
    
    $
    (2,244
    )Average common shares outstanding
    
    
    11,756
    
    
    
    10,140Basic loss per share
    
    $
    (0.31
    )
    
    $
    (0.22
    )Diluted loss per share
    
    $
    (0.31
    )
    
    $
    (0.22
    )
 10




---



##### Table of Contents



NOTE 5    Stockholders Equity
   NOTE 6    Commitments and Contingencies
  11




---



##### Table of Contents



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




---



##### Table of Contents



®
  ®
   13




---



##### Table of Contents



14




---



##### Table of Contents



Recent Accounting Pronouncements
  15




---



##### Table of Contents



Results of Operations
 Three-Month Periods Ended March 31, 2007 and 2006
  16




---



##### Table of Contents



Revenues and other income
  Research and Development Expenses
 General and Administrative Expenses
 Liquidity and Capital Resources
   17




---



##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk
  18




---



##### Table of Contents



Item 4. Controls and Procedures
   19




---



##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 5. Other Information
  
 Item 6. Exhibits
 10.1
    
    Employment Agreement between the Company and Dr. Andre van As dated March 7,
2007. Exhibit 10.1 to the Companys Current Report on Form 8-K as filed with the
Commission on March 8, 2007 is incorporated herein by reference.10.2
    
    Fourth Amendment to PHS Patent License Agreement, as amended, dated December 9,
2003 between the Company and certain agencies of the United States Public Health
Service within the Department of Health and Human Services. Exhibit 10.1 to the
Companys Current Report on Form 8-K as filed with the Commission on March 20, 2007 is
incorporated herein by reference.10.3
    
    Waiver to PHS Patent License Agreement, as amended, dated March 8, 2007 between
the Company and certain agencies of the United States Public Health Service within the
Department of Health and Human Services. Exhibit 10.2 to the Companys Current Report
on Form 8-K as filed with the Commission on March 20, 2007 is incorporated herein by
reference.10.4**
    
    Fifth Amendment to PHS Patent License Agreement, as amended, dated March 15, 2007
between the Company and certain agencies of the United States Public Health Service
within the Department of Health and Human Services. Exhibit 10.3 to the Companys
Current Report on Form 8-K as filed with the Commission on March 20, 2007 is
incorporated herein by reference.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. 20




---



##### Table of Contents



**
    
    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. 21




---



##### Table of Contents



SIGNATURES
  REPROS THERAPEUTICS INC.Date: May 9, 2007By:
    
    /s/ Joseph S. PodolskiJoseph S. PodolskiPresident, Chief Executive Officer and Director(Principal Executive Officer)Date: May 9, 2007By:
    
    /s/ Louis Ploth, Jr.Louis Ploth, Jr.Vice President Business Development, Chief Financial Officer, Director and Secretary(Principal Financial and Accounting Officer)
 22




---



##### Table of Contents



10.1
    
    Employment Agreement between the Company and Dr. Andre van As dated March 7,
2007. Exhibit 10.1 to the Companys Current Report on Form 8-K as filed with the
Commission on March 8, 2007 is incorporated herein by reference.10.2
    
    Fourth Amendment to PHS Patent License Agreement, as amended, dated December 9,
2003 between the Company and certain agencies of the United States Public Health
Service within the Department of Health and Human Services. Exhibit 10.1 to the
Companys Current Report on Form 8-K as filed with the Commission on March 20, 2007 is
incorporated herein by reference.10.3
    
    Waiver to PHS Patent License Agreement, as amended, dated March 8, 2007 between
the Company and certain agencies of the United States Public Health Service within the
Department of Health and Human Services. Exhibit 10.2 to the Companys Current Report
on Form 8-K as filed with the Commission on March 20, 2007 is incorporated herein by
reference.10.4**
    
    Fifth Amendment to PHS Patent License Agreement, as amended, dated March 15, 2007
between the Company and certain agencies of the United States Public Health Service
within the Department of Health and Human Services. Exhibit 10.3 to the Companys
Current Report on Form 8-K as filed with the Commission on March 20, 2007 is
incorporated herein by reference.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.