Enzon Reports 1st Quarter 2011 Results
--Investments in R&D translating to continued progress with oncology pipeline--
For the first quarter of 2011, Enzon reported income from continuing
operations of
"We have had a productive start to 2011, as we completed our
transformation to an R&D organization and successfully executed our
strategy focused on the development of our high-value oncology
pipeline," stated
First Quarter 2011 and Recent Highlights
-
At the 2011
American Association of Cancer Research (AACR) Annual Meeting in April, Enzon presented data from preclinical and clinical studies of four investigational messenger RNA (mRNA) antagonists, demonstrating the compounds' potential to inhibit key tumor targets that antibodies and small molecules have limited ability to control and access. -
In January, Enzon announced the
FDA had accepted its Investigational New Drug (IND) application for its Androgen Receptor (AR) mRNA antagonist. Following this approval, the Company enrolled and treated the first patient in its Phase I trial of the AR antagonist in castration-resistant prostate cancer. -
In April, the Company received notice that the
U.S. Food and Drug Administration (FDA) granted firtecan-pegol (EZN-2208) orphan drug designation for the treatment of neuroblastoma. Orphan drug designation provides for marketing exclusivity for that indication in the U.S., an expedited review process, a reduction in associated application fees and certain other benefits. -
During the first quarter of 2011, Enzon repurchased 3.9 million shares
of outstanding common stock, totaling
$41.5 million . As ofApril 30, 2011 , the Company had purchased a total of 5.7 million shares of outstanding common stock for a cumulative cost of$62.2 million .
Summary of Financial Results
Research and Development
The Company's pipeline research and development expenses were
Revenues
Royalty Revenue
Revenues received from the Company's royalty products for the three
months ended
Sale of
During the first quarter of 2011, the Company received a
The Company recorded revenue of
General and Administrative
General and administrative expenses decreased approximately 49 percent
to
Contracted Services
As part of the specialty pharmaceutical sale, Enzon agreed to continue to assist in the development of the next-generation Adagen and Oncaspar programs on a contracted basis. In addition, Enzon agreed to perform ongoing general, administrative, and selling services as requested by the purchaser. The transition service agreement supporting these activities provides for Enzon to be reimbursed at a cost plus an additional mark-up for all expenses incurred. The level of these activities has diminished substantially over the period subsequent to the sale of the specialty pharmaceutical business and should decline significantly from 2010 levels throughout the remainder of 2011.
Restructuring Charges
During the first quarter of 2011, the Company completed the planned
relocation of its corporate offices from
Cash and Investments
Total cash reserves, which include cash, cash equivalents, short-term
investments, and marketable securities, were
Adjusted Financial Results
For the three months ended
Reconciliation of GAAP income from continuing operations to adjusted loss from continuing operations
The following table reconciles the Company's income and income per
diluted share from continuing operations as determined in accordance
with U.S. generally accepted accounting principles (GAAP) to its
adjusted loss and loss per diluted share from continuing operations for
the three months ended
|
Three Months Ended 3/31/11
(In thousands, except |
Three Months Ended 3/31/10
(In thousands, except |
||||||||||||||||
| Income (loss) | Per diluted share(3) | Income (loss) | Per diluted share(3) | ||||||||||||||
|
GAAP income from continuing |
$ |
431 |
$ |
0.01 |
$ |
20,754 |
$ |
0.29 |
|||||||||
|
Sale of in-process research and |
(5,000 |
) |
- |
(40,900 |
) |
- |
|||||||||||
| Restructuring charge(2) | 359 | - | 9,889 | - | |||||||||||||
|
Adjusted loss from continuing |
($4,210 |
) |
($0.07 |
) |
($10,257 |
) |
($0.20 |
) |
|||||||||
(1) Adjusted financial results exclude the sale of in-process research and development associated with the sale of the Company's specialty pharmaceutical business and the subsequent milestone payment.
(2) Adjusted financial results exclude restructuring charges associated with: on-going lease commitments for vacated corporate offices and severance associated with termination of employees involved with the Company's specialty pharmaceutical business and certain general and administrative functions including the resignation of the former CEO.
(3) The diluted earnings per share computations involve inclusion of dilutive shares in the denominator and other adjustments to reflect an assumed conversion of notes payable. Such factors are not included in the computation of diluted loss per share. A per-share computation of the individual reconciling items in this display is not meaningful as a result of the two different bases of computation of the other elements.
(4) Adjusted loss and adjusted loss per diluted share from continuing operations, as the Company defines them, may differ from similarly named measures used by other entities and consequently, could be misleading unless all entities calculated and defined such items in the same manner. The Company believes that investors' understanding of its performance is enhanced by disclosing adjusted net loss and adjusted net loss per diluted share reflecting adjustments for certain items that the Company deems to affect comparability between periods.
About Enzon
Forward Looking Statements
There are forward-looking statements contained herein, which can be
identified by the use of forward-looking terminology such as the words
"believes," "expects," "may," "will," "should," "potential,"
"anticipates," "plans," or "intends" and similar expressions. Such
forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause actual results, events or
developments to be materially different from the future results, events
or developments indicated in such forward-looking statements. Such
factors include but are not limited to the timing, success and cost of
clinical studies for Enzon's product candidates, the ability to obtain
regulatory approval of Enzon's product candidates, Enzon's ability to
obtain the funding necessary to develop its product candidates, market
acceptance of and demand for Enzon's product candidates, and the impact
of competitive products, pricing and technology. A more detailed
discussion of these and other factors that could affect results is
contained in Enzon's filings with the
|
Enzon Pharmaceuticals, Inc. and Subsidiaries Consolidated Statements of Operations Three Months ended March 31, 2011 and 2010 (In thousands, except per-share amounts) (Unaudited) |
||||||||
| Three months ended | ||||||||
| March 31, | ||||||||
| 2011 | 2010 | |||||||
| Revenues: | ||||||||
| Royalties | $ | 11,762 | $ | 12,901 | ||||
| Sale of in-process research and development | 5,000 | 40,900 | ||||||
| Contract research and development | 1,094 | 2,609 | ||||||
| Miscellaneous income | 166 | 1,843 | ||||||
| Total revenues | 18,022 | 58,253 | ||||||
| Operating expenses: | ||||||||
| Research and development — pipeline | 10,548 | 11,515 | ||||||
| Research and development — specialty and contracted services | 647 | 3,059 | ||||||
| General and administrative | 5,086 | 9,932 | ||||||
| General and administrative — contracted services | 58 | 1,400 | ||||||
| Restructuring charge | 359 | 9,889 | ||||||
| Total operating expenses | 16,698 | 35,795 | ||||||
| Operating income | 1,324 | 22,458 | ||||||
| Other income (expense): | ||||||||
| Investment income, net | 459 | 971 | ||||||
| Interest expense | (1,480 | ) | (2,676 | ) | ||||
| Other, net | 128 | 1 | ||||||
| Total other income (expense) | (893 | ) | (1,704 | ) | ||||
| Income from continuing operations before income tax provision | 431 | 20,754 | ||||||
| Income tax provision | - | - | ||||||
| Income from continuing operations | 431 | 20,754 | ||||||
| Income and gain from discontinued operations, net of income tax | - | 179, 053 | ||||||
| Net income | $ | 431 | $ | 199,807 | ||||
| Earnings per common share - continuing operations | ||||||||
| Basic | $ | 0.01 | $ | 0.40 | ||||
| Diluted | $ | 0.01 | $ | 0.29 | ||||
| Earnings per common share — discontinued operations | ||||||||
| Basic | $ | - | $ | 3.42 | ||||
| Diluted | $ | - | $ | 2.41 | ||||
| Earnings per common share — net income | ||||||||
| Basic | $ | 0.01 | $ | 3.82 | ||||
| Diluted | $ | 0.01 | $ | 2.70 | ||||
| Weighted-average shares - basic | 58,002 | 52,284 | ||||||
| Weighted-average shares - diluted | 58,736 | 74,242 | ||||||
|
Enzon Pharmaceuticals, Inc. and Subsidiaries Condensed Consolidated Balance Sheets
March 31, 2011 and December 31, 2010 (Unaudited) |
||||||
|
March 31,
2011 |
December 31, |
|||||
| Assets | ||||||
| Current assets: | ||||||
| Cash and short-term investments | $ | 405,522 | $ | 428,700 | ||
| Other current assets | 4,589 | 5,916 | ||||
| Total current assets | 410,111 | 434,616 | ||||
| Property and equipment, net | 20,223 | 21,574 | ||||
| Other assets: | ||||||
| Marketable securities | 13,334 | 31,394 | ||||
| Other assets | 1,175 | 1,273 | ||||
| Total other assets | 14,509 | 32,667 | ||||
| Total assets | $ | 444,843 | $ | 488,857 | ||
| Liabilities and Stockholders' Equity | ||||||
| Current liabilities: | ||||||
| Accounts payable and accrued expenses | $ | 14,529 | $ | 18,387 | ||
| Total current liabilities | 14,529 | 18,387 | ||||
| Notes payable | 134,499 | 134,499 | ||||
| Other liabilities | 4,355 | 4,114 | ||||
| Total liabilities | 153,383 | 157,000 | ||||
| Stockholders' equity | 291,460 | 331,857 | ||||
| Total liabilities and stockholders' equity | $ | 444,843 | $ | 488,857 | ||
| Common shares outstanding | 55,053 | 58,818 | ||||
Investor Contact:
andrea@argotpartners.com
of
Media
Contact:
meghan@argotpartners.com
Source:
News Provided by Acquire Media