Incara, citing increased spending for pre-clinical trials of a proposed new drug, reported a loss of nearly $2.5 million in its first fiscal quarter.

Incara (OTC Bulletin Board: ICRA) secured additional funding in order to support the research.

The company said it lost 9 cents per share, compared to an $86,000 net gain, or a penny a share, a year ago following the sale of its liver cell therapy program.

Incara is preparing to file an investigational new drug application with the Food and Drug Administration for AEOL 10150, a treatment for Lou Gehrig’s Disease, or amotrophic lateral sclerosis.

“With completion of recent toxicology studies, Incara believes it has satisfied the preclinical requirements necessary to prepare and file an IND with the FDA, and initiate Phase 1 clinical trials,” the company said in a statement. “If the Phase 1 clinical trial results are satisfactory and assuming adequate financial resources, Incara’s clinical plan calls for initiating a Phase 2/3 clinical trial as early as the first half of 2005.”

In November, Incara received an “orphan drug” designation for AEOL 10150.

Such a designation means the drug could receive funding support for clinical trials, other financial incentives, and seven years of marketing exclusivity.