##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 
 FORM 10-Q
 (Mark One)
 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: 0-27718
 NEOSE TECHNOLOGIES, INC.
  Delaware
    
    13-3549286(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)102 Rock RoadHorsham, Pennsylvania
    
    19044(Address of principal executive offices)
    
    (Zip Code)
 (Registrants telephone number, including area code)
  þ o
  o þ o
  o þ




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##### 



NEOSE TECHNOLOGIES, INC.
 INDEX
 PagePART I.
    
    FINANCIAL INFORMATION:Item 1.
    
    Financial Statements (unaudited)Balance Sheets as of September 30, 2007 and December 31, 2006
    
    
    3Statements of Operations for the three and nine months ended
September 30, 2007 and 2006
    
    
    4Statements of Cash Flows for the nine months ended September 30, 2007
and 2006
    
    
    5Notes to Financial Statements
    
    
    6Item 2.
    
    Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    23Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    35Item 4.
    
    Controls and Procedures
    
    
    36PART II.
    
    OTHER INFORMATION:Item 1A.
    
    Risk Factors
    
    
    37Item 6.
    
    Exhibits
    
    
    37SIGNATURES
    
    
    38Certification of CEO, pursuant to Sec 302Certification of CFO, Pursuant to Sec 302Certification of CEO, pursuant to Section 906Certification of CFO, pursuant to Sec 906
  2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 Neose Technologies, Inc.
 
 Balance Sheets
 September 30,
    
    
    December 31,2007
    
    
    2006AssetsCurrent assets:Cash and cash equivalents
    
    $
    29,123
    
    
    $
    16,388Accounts receivable, net
    
    
    1,444
    
    
    
    286Prepaid expenses and other current assets
    
    
    965
    
    
    
    1,284Total current assets
    
    
    31,532
    
    
    
    17,958Property and equipment, net
    
    
    13,815
    
    
    
    13,104Intangible and other assets, net
    
    
    71
    
    
    
    181Total assets
    
    $
    45,418
    
    
    $
    31,243Liabilities and Stockholders EquityCurrent liabilities:Note payable
    
    $
    83
    
    
    $
    Current portion of long-term debt and capital lease obligations
    
    
    968
    
    
    
    1,251Accounts payable
    
    
    644
    
    
    
    1,848Accrued compensation
    
    
    1,525
    
    
    
    1,772Accrued expenses
    
    
    6,232
    
    
    
    4,749Deferred revenue
    
    
    919
    
    
    
    645Total current liabilities
    
    
    10,371
    
    
    
    10,265Warrant liability
    
    
    7,423
    
    
    
    Long-term debt and capital lease obligations, net of current portion
    
    
    204
    
    
    
    580Deferred revenue, net of current portion
    
    
    5,285
    
    
    
    4,329Other liabilities
    
    
    539
    
    
    
    510Total liabilities
    
    
    23,822
    
    
    
    15,684Stockholders equity:Preferred stock, par value $.01 per share, 5,000 shares
authorized, none issued
    
    
    
    
    
    
    Common stock, par value $.01 per share, 150,000 and 75,000
shares authorized; 54,468 and 32,972 shares issued and
outstanding
    
    
    545
    
    
    
    330Additional paid-in capital
    
    
    312,694
    
    
    
    281,556Accumulated deficit
    
    
    (291,643
    )
    
    
    (266,327
    )Total stockholders equity
    
    
    21,596
    
    
    
    15,559Total liabilities and stockholders equity
    
    $
    45,418
    
    
    $
    31,243
  3




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Neose Technologies, Inc.
 
 Statements of Operations
 Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Revenue from collaborative agreements
    
    $
    2,631
    
    
    $
    1,477
    
    
    $
    6,099
    
    
    $
    5,588Operating expenses:Research and development
    
    
    10,735
    
    
    
    6,811
    
    
    
    28,289
    
    
    
    21,173General and administrative
    
    
    2,560
    
    
    
    3,028
    
    
    
    8,073
    
    
    
    9,050Total operating expenses
    
    
    13,295
    
    
    
    9,839
    
    
    
    36,362
    
    
    
    30,223Gain on sale of Witmer Road Facility
    
    
    
    
    
    
    7,335
    
    
    
    
    
    
    
    7,335Operating loss
    
    
    (10,664
    )
    
    
    (1,027
    )
    
    
    (30,263
    )
    
    
    (17,300
    )Decrease in fair value of warrant liability
    
    
    7,772
    
    
    
    
    
    
    
    3,342
    
    
    
    Interest income
    
    
    421
    
    
    
    269
    
    
    
    1,195
    
    
    
    943Interest expense
    
    
    (35
    )
    
    
    (592
    )
    
    
    (123
    )
    
    
    (1,225
    )Loss before income tax benefit
    
    
    (2,506
    )
    
    
    (1,350
    )
    
    
    (25,849
    )
    
    
    (17,582
    )Income tax benefit
    
    
    
    
    
    
    
    
    
    
    533
    
    
    
    Net loss
    
    $
    (2,506
    )
    
    $
    (1,350
    )
    
    $
    (25,316
    )
    
    $
    (17,582
    )Basic and diluted net loss per share
    
    $
    (0.05
    )
    
    $
    (0.04
    )
    
    $
    (0.52
    )
    
    $
    (0.54
    )Weighted-average shares outstanding used
in computing basic and diluted net loss
per share
    
    
    54,449
    
    
    
    32,866
    
    
    
    48,844
    
    
    
    32,818
  4




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Neose Technologies, Inc.
 
 Statements of Cash Flows
 Nine months endedSeptember 30,2007
    
    
    2006Cash flows from operating activities:Net loss
    
    $
    (25,316
    )
    
    $
    (17,582
    )Adjustments to reconcile net loss to net cash used in
operating activities:Decrease in fair value of warrant liability
    
    
    (3,342
    )
    
    
    Impairment of property and equipment
    
    
    
    
    
    
    121Depreciation and amortization expense
    
    
    1,467
    
    
    
    1,650Non-cash compensation expense
    
    
    1,681
    
    
    
    1,940Non-cash rent expense
    
    
    130
    
    
    
    (Gain) loss on disposition of property and equipment
    
    
    4
    
    
    
    (7,335
    )Premiums paid on early repayment of debt
    
    
    
    
    
    
    215Accelerated amortization of debt issuance costs on early
repayment of debt
    
    
    
    
    
    
    133Changes in operating assets and liabilities:Accounts receivable
    
    
    (1,570
    )
    
    
    915Prepaid expenses and other current assets
    
    
    188
    
    
    
    (122
    )Intangible and other assets
    
    
    (13
    )
    
    
    Accounts payable
    
    
    (695
    )
    
    
    (220
    )Accrued compensation
    
    
    (247
    )
    
    
    274Accrued expenses
    
    
    3,117
    
    
    
    413Deferred revenue
    
    
    1,230
    
    
    
    (921
    )Other liabilities
    
    
    29
    
    
    
    35Net cash used in operating activities
    
    
    (23,337
    )
    
    
    (20,484
    )Cash flows from investing activities:Purchases of property and equipment
    
    
    (3,417
    )
    
    
    (499
    )Proceeds from sale of equipment and assets held for sale
    
    
    
    
    
    
    19,344Net cash
provided by (used in) investing activities
    
    
    (3,417
    )
    
    
    18,845Cash flows from financing activities:Proceeds from issuance of debt
    
    
    367
    
    
    
    539Repayments of debt
    
    
    (1,315
    )
    
    
    (12,649
    )Premiums paid on early repayment of debt
    
    
    
    
    
    
    (215
    )Proceeds from issuance of common stock and warrants, net
    
    
    40,486
    
    
    
    12Payment of withholding taxes related to restricted stock units
    
    
    (49
    )
    
    
    (174
    )Net cash provided by (used in) financing activities
    
    
    39,489
    
    
    
    (12,487
    )Net increase (decrease) in cash and cash equivalents
    
    
    12,735
    
    
    
    (14,126
    )Cash and cash equivalents, beginning of period
    
    
    16,388
    
    
    
    37,738Cash and cash equivalents, end of period
    
    $
    29,123
    
    
    $
    23,612
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Neose Technologies, Inc.
 
 Notes to Financial Statements
 1. Background
      6




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Neose Technologies, Inc.
 Notes to Financial Statements
 de novo
    7




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Neose Technologies, Inc.
 Notes to Financial Statements
  2. Interim Financial Information
  3. Summary of Significant Accounting Policies
 Use of Estimates
  Accounts Receivable
  8




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Neose Technologies, Inc.
 Notes to Financial Statements
   September 30,
    
    
    December 31,2007
    
    
    2006Billed receivables
    
    $
    532
    
    
    $
    286Unbilled receivables
    
    
    931
    
    
    
    1,463
    
    
    
    286Less allowance for doubtful accounts
    
    
    (19
    )
    
    
    $
    1,444
    
    
    $
    286
 Warrant Liability
 Accounting for Derivative Financial
Instruments Indexed to, and Potentially Settled in, a Companys Own Stock
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Neose Technologies, Inc.
 Notes to Financial Statements
 Accounting for Registration Payment Arrangements Accounting for Contingencies, Reasonable
Estimation of the Amount of a Loss
 Net Loss Per Share
  Comprehensive Loss
 Reporting Comprehensive Income,
 Fair Value of Financial Instruments
  10




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Neose Technologies, Inc.
 Notes to Financial Statements
  Recent Accounting Pronouncements
 Accounting for Nonrefundable Advance Payments for
Goods or Services to Be Used in Future Research and Development Activities- .
 The Fair Value Option for Financial Assets and
Financial Liabilities  Including an amendment of FASB Statement No. 115
 Accounting for Contingencies
 Fair Value Measurements
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Neose Technologies, Inc.
 Notes to Financial Statements
  Accounting for Uncertainty in Income
Taxes  an interpretation of FASB Statement No. 109 Accounting for
Income Taxes
 4. Supplemental Disclosure of Cash Flow Information
  Nine months endedSeptember 30,2007
    
    
    2006Supplemental disclosure of cash flow information:Cash paid for interest, net of amounts capitalized
    
    $
    124
    
    
    $
    1,109Non-cash investing activities:(Decrease) increase in accrued property and equipment
included in accounts payable and accrued expenses
    
    $
    (1,730
    )
    
    $
    24Assets acquired under capital leases
    
    $
    373
    
    
    $
    Non-cash financing activities:Initial measurement of warrant liability (see Note 10)
    
    $
    10,765
    
    
    $
    Conversion of accrued compensation from liability to
equity-classified award upon grant of restricted
stock units
    
    $
    
    
    
    $
    129
 12




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Neose Technologies, Inc.
 Notes to Financial Statements
 5. Prepaid Expenses and Other Current Assets
  September 30,
    
    
    December 31,2007
    
    
    2006Prepaid maintenance agreements
    
    $
    217
    
    
    $
    162Prepaid insurance (see Note 8)
    
    
    172
    
    
    
    86Prepaid contract research and development services
    
    
    170
    
    
    
    228Prepaid clinical trials and non-clinical studies
    
    
    86
    
    
    
    124Prepaid rent
    
    
    65
    
    
    
    195Other prepaid expenses and current assets
    
    
    255
    
    
    
    489$
    965
    
    
    $
    1,284
 6. Property and Equipment
  September 30,
    
    
    December 31,2007
    
    
    2006Leasehold improvements
    
    $
    12,985
    
    
    $
    9,817Laboratory, manufacturing, and office equipment
    
    
    6,874
    
    
    
    5,874Construction-in-progress
    
    
    
    
    
    
    2,14219,859
    
    
    
    17,833Less accumulated depreciation and amortization
    
    
    (6,044
    )
    
    
    (4,729
    )$
    13,815
    
    
    $
    13,104
    13




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Neose Technologies, Inc.
 Notes to Financial Statements
   7. Intangible and Other Assets
 Acquired Intellectual Property
  Deposits
  14




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Neose Technologies, Inc.
 Notes to Financial Statements
 8. Debt and Capital Lease Obligations
  September 30,
    
    
    December 31,2007
    
    
    2006Notes payable to equipment lender,
secured by equipment and facility
improvements, interest rates from
8.1% to 9.5%, due 2007 to 2008
    
    $
    501
    
    
    $
    1,101Term loan from landlord (unsecured),
annual interest at 13.0%, due June
2008
    
    
    307
    
    
    
    622Note payable, secured by insurance
policies, annual interest at 5.7%,
due November 2007
    
    
    83
    
    
    
    Subtotal
    
    
    891
    
    
    
    1,723Capital lease obligations
    
    
    364
    
    
    
    108Total debt
    
    
    1,255
    
    
    
    1,831Less note payable, secured by
insurance policies
    
    
    (83
    )
    
    
    Less current portion
    
    
    (968
    )
    
    
    (1,251
    )Total debt, net of current portion
    
    $
    204
    
    
    $
    580
 Note Payable Secured by Insurance Policies
  15




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Neose Technologies, Inc.
 Notes to Financial Statements
 9. Accrued Expenses
  September 30,
    
    
    December 31,2007
    
    
    2006Clinical trials and non-clinical studies
    
    $
    3,720
    
    
    $
    625Non-refundable contract fee
    
    
    1,400
    
    
    
    Professional fees
    
    
    663
    
    
    
    1,469Contract research and development services
    
    
    321
    
    
    
    1,283Property and equipment
    
    
    22
    
    
    
    1,244Other expenses
    
    
    106
    
    
    
    128$
    6,232
    
    
    $
    4,749
   10. Warrant Liability
  16




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Neose Technologies, Inc.
 Notes to Financial Statements
  March 13,
    
    June 30,
    
    September 30,2007
    
    2007
    
    2007Aggregate fair value
    
    $
    10,765
    
    
    $
    15,195
    
    
    $
    7,423Expected volatility
    
    
    75
    %
    
    
    68
    %
    
    
    66
    %Remaining contractual
term (years)
    
    
    5.0
    
    
    
    4.7
    
    
    
    4.4Risk-free interest rate
    
    
    4.4
    %
    
    
    4.9
    %
    
    
    4.2
    %Expected dividend yield
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %Common stock price
    
    $
    1.79
    
    
    $
    2.46
    
    
    $
    1.54
 11. Stockholders Equity
  17




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Neose Technologies, Inc.
 Notes to Financial Statements
 12. Equity-based Compensation
  Weighted-Weighted-
    
    
    
    
    
    
    averageaverage
    
    
    Aggregate
    
    
    remainingexercise
    
    
    intrinsic
    
    
    contractualShares
    
    
    price
    
    
    value
    
    
    life (years)Outstanding at
January 1, 2007
    
    
    5,281
    
    
    $
    11.61Granted
    
    
    1,340
    
    
    
    2.39Exercised
    
    
    (11
    )
    
    
    2.55Forfeited
    
    
    (379
    )
    
    
    4.41Expired
    
    
    (1,430
    )
    
    
    16.20Outstanding at
September 30, 2007
    
    
    4,801
    
    
    $
    8.26
    
    
    $
    
    
    
    
    6.8Vested at September
30, 2007 and
expected to vest
    
    
    4,262
    
    
    $
    8.94
    
    
    $
    
    
    
    
    6.8Exercisable at
September 30, 2007
    
    
    3,131
    
    
    $
    11.05
    
    
    $
    
    
    
    
    5.7
 Fair Value Disclosures
  18




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Neose Technologies, Inc.
 Notes to Financial Statements
  Non-employee Stock Options
  Restricted Stock Units
  Weighted-average
    
    
    Aggregategrant-date
    
    
    intrinsicShares
    
    
    fair value
    
    
    valueOutstanding at January 1, 2007
    
    
    128
    
    
    $
    2.34Awarded
    
    
    
    
    
    
    Settled
    
    
    (94
    )
    
    
    2.31Forfeited
    
    
    
    
    
    
    Outstanding at September 30,
2007
    
    
    34
    
    
    $
    2.44
    
    
    $
    52Vested at September 30, 2007
and expected to vest
    
    
    34
    
    
    $
    2.44
    
    
    $
    52
  19




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Neose Technologies, Inc.
 Notes to Financial Statements
 13. Collaborative Agreements and Significant Customer Concentration
  Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Novo NordiskResearch and
development funding
    
    $
    1,740
    
    
    $
    1,244
    
    
    $
    3,874
    
    
    $
    3,323Substantive milestones
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    750License fees
    
    
    216
    
    
    
    115
    
    
    
    529
    
    
    
    3231,956
    
    
    
    1,359
    
    
    
    4,403
    
    
    
    4,396BioGeneriXResearch and
development funding
    
    
    661
    
    
    
    104
    
    
    
    1,654
    
    
    
    997License fees
    
    
    14
    
    
    
    14
    
    
    
    42
    
    
    
    195675
    
    
    
    118
    
    
    
    1,696
    
    
    
    1,192$
    2,631
    
    
    $
    1,477
    
    
    $
    6,099
    
    
    $
    5,588
 Novo Nordisk A/S Agreements
   20




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##### Table of Contents



Neose Technologies, Inc.
 Notes to Financial Statements
 BioGeneriX AG Agreements
   14. Restructurings and Employee Severance Costs
 2007 Restructuring
   21




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Neose Technologies, Inc.
 Notes to Financial Statements
  2006 Restructuring
   15. Income Tax Benefit
  22




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 CAUTIONARY STATEMENT PURSUANT TO SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION ACT OF
1995:
 This report includes forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are not historical facts and
include, but are not limited to, statements about our plans, objectives, representations and
contentions that typically may be identified by use of terms such as anticipate, believe,
estimate, plan, may, expect, intend, could, potential, and similar expressions,
although some forward-looking statements are expressed differently. These forward-looking
statements include, among others, statements about our:
 
    
    estimate that our existing cash and cash equivalents, expected proceeds from
collaborations and license agreements, and interest income should be sufficient to meet
our operating and capital requirements at least through the third quarter of 2008;
    
    expected losses;
    
    expectations for future capital requirements;
    
    expectations for increases in operating expenses;
    
    expectations for increases in research and development, and marketing, general and
administrative expenses in order to develop products, procure commercial quantities of
reagents and products, and commercialize our technology;
    
    expectations regarding the scope and expiration of patents;
    
    expectations regarding the timing of non-clinical activities, regulatory meetings
and submissions, as well as the progression of clinical trials, for NE-180,
GlycoPEG-GCSF and GlycoPEG-Factor VIIa;
    
    expectations for the development of long-acting versions of EPO and G-CSF, and
subsequent proprietary drug candidates;
    
    expectations regarding net cash utilization;
    
    expectations for generating revenue; and
    
    expectations regarding the timing and character of new or expanded collaborations
and for the performance of our existing collaboration partners in
connection with the development and commercialization of products incorporating our
technology.
 You should be aware that the forward-looking statements included in this report represent
managements current judgment and expectations, but our actual results, events and
 23




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performance could differ materially from those in the forward-looking statements. Potential risks and
uncertainties that could affect our actual results include the following:
 
    
    our ability to obtain the funds necessary for our operations;
    
    our ability to meet forecasted timelines due to internal or external causes;
    
    unfavorable non-clinical and clinical results for our product candidates or product
categories;
    
    regulatory developments that adversely affect our ability to market our products or
obtain government approvals;
    
    our ability to develop commercial-scale manufacturing processes for our products and
reagents, either independently or in collaboration with others;
    
    the performance of our contract research organizations and contract manufacturing
organizations;
    
    our ability to enter into and maintain collaborative arrangements;
    
    our ability to obtain adequate sources of proteins and reagents;
    
    our ability to develop and commercialize products without infringing the patent or
intellectual property rights of others;
    
    our ability to expand and protect our intellectual property and to operate without
infringing the rights of others;
    
    our ability and our collaborators ability to develop and commercialize therapeutic
proteins and our ability to commercialize our technology;
    
    our ability to attract and retain key personnel;
    
    our ability to compete successfully in an intensely competitive field; and
    
    general economic conditions.
 These and other risks and uncertainties that could affect our actual results are discussed in
this report and in our other filings with the SEC, particularly in Item 1A of Part I of our Annual
Report on Form 10-K for the year ended December 31, 2006 in the section entitled Risk Factors and
in Item 1A of Part II of our subsequently filed Quarterly Reports on Form 10-Q.
 Although we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, events, levels of activity, performance, or
achievements. We do not assume responsibility for the accuracy and completeness of the
forward-looking statements other than as required by applicable law. We do not undertake any duty
to update any of the forward-looking statements after the date of this report to conform them to
actual results, except as required by the federal securities laws.
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You should read this section in combination with the section entitled Managements Discussion
and Analysis of Financial Condition and Results of Operations for the year ended December 31, 2006,
included in our Annual Report on Form 10-K for the year ended December 31, 2006 and in our 2006
Annual Report to Stockholders.
 Overview
      25




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de novo
     Liquidity and Capital Resources
 Overview
  26




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Operating Activities
  Investing Activities
  27




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Financing Activities
 Equity Financing Activities
  Debt Financing Activities
  Note Payable Secured by Insurance Policies
  Term Loan from Landlord
  Equipment Loans
  28




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##### Table of Contents



Capital Lease Obligations
  Operating Leases
  Summary of Contractual Obligations
  Off-Balance Sheet Arrangements
  Critical Accounting Policies and Estimates
  29




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##### Table of Contents



Warrant Liability
 Accounting for Derivative Financial
Instruments Indexed to, and Potentially Settled in, a Companys Own Stock
  Results of Operations
  Revenue from Collaborative Agreements
  30




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##### Table of Contents



Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Novo NordiskResearch and
development funding
    
    $
    1,740
    
    
    $
    1,244
    
    
    $
    3,874
    
    
    $
    3,323Substantive milestones
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    750License fees
    
    
    216
    
    
    
    115
    
    
    
    529
    
    
    
    3231,956
    
    
    
    1,359
    
    
    
    4,403
    
    
    
    4,396BioGeneriXResearch and
development funding
    
    
    661
    
    
    
    104
    
    
    
    1,654
    
    
    
    997License fees
    
    
    14
    
    
    
    14
    
    
    
    42
    
    
    
    195675
    
    
    
    118
    
    
    
    1,696
    
    
    
    1,192$
    2,631
    
    
    $
    1,477
    
    
    $
    6,099
    
    
    $
    5,588
   Research and Development Expense
  31




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32




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##### Table of Contents



Development Stage
    
    StatusGlycoPEGylation:NE-180
    
    Clinical (Phase II)
    
    ActiveGlycoPEG-GCSF
    
    Clinical (Phase I)
    
    ActiveGlycoPEG-Factor VIIa
    
    Clinical (Phase I)
    
    ActiveOther protein projects
    
    Research/Preclinical
    
    ActiveOther Glycotechnology Programs:Non-protein therapeutic applications
    
    Research
    
    Active
    33




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##### Table of Contents



Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006GlycoPEGylation
    
    $
    9,046
    
    
    $
    3,495
    
    
    $
    21,418
    
    
    $
    12,379Other Glycotechnology Programs
    
    
    9
    
    
    
    102
    
    
    
    47
    
    
    
    434Indirect expenses
    
    
    1,680
    
    
    
    3,214
    
    
    
    6,824
    
    
    
    8,360$
    10,735
    
    
    $
    6,811
    
    
    $
    28,289
    
    
    $
    21,173
 GlycoPEGylation
  Other Glycotechnology Programs
  Indirect expenses
  General and Administrative Expense
  Other Income and Expense
  34




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Item 3. Quantitative and Qualitative Disclosures About Market Risk
 Equity Price Risk
  Foreign Exchange Risk
  35




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##### Table of Contents



Item 4. Controls and Procedures
 Evaluation of disclosure controls and procedures
  Changes in internal control over financial reporting
  36




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##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 1A. Risk Factors
  
 Item 6. Exhibits
 31.1*
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and
15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2*
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and
15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1*
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2*
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Filed herewith. 37




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##### Table of Contents



SIGNATURES
  NEOSE TECHNOLOGIES, INC.Date: November 9, 2007
    By:
    /s/ A. Brian DavisA. Brian DavisSenior Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer and
Duly Authorized Signatory) 38




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##### Table of Contents



Exhibit Index
 Exhibit
    
    Description31.1
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and
15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and
15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 39