Enzon Reports 2nd Quarter 2011 Results
Second Quarter 2011 and Recent Highlights
In May , Enzon appointedAna I. Stancic Senior Vice President, Finance and Chief Financial Officer of the Company. Ms. Stancic will oversee Enzon's financial planning, strategy and controls as well as its investor relations and information technology functions.- 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 April , the Company received notice that theU.S. Food andDrug 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 second quarter of 2011, Enzon repurchased 5.1 million shares of outstanding common stock, totaling
$54.8 million . As ofJune 30, 2011 , the Company had purchased a total of 9.0 million shares of outstanding common stock at a cumulative cost of$96.7 million .
Summary of Financial Results
Research and Development
The Company's pipeline research and development expenses were unchanged at
As announced in May, Enzon will discontinue its PEG-SN38 (EZN-2208) clinical program in metastatic colorectal cancer (mCRC) following the conclusion of its Phase II study. The Company will continue to enroll studies for other PEG-SN38 programs, which include a Phase II study in metastatic breast cancer that is nearing full enrollment and a Phase I study in pediatric solid tumors. In addition, the
Revenues
Royalty Revenue
Revenues received from the Company's royalty products for the three months ended
General and Administrative
General and administrative expenses decreased approximately 20 percent to
Contracted Services
As part of the sale of its specialty pharmaceutical business, 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 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.
Cash and Investments
Total cash reserves, which include cash, cash equivalents, short-term investments and marketable securities, were
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
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three months ended
June 30,
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2011 2010
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Revenues:
Royalties $ 9,172 $ 10,588
Contract research and development 231 2,602
Miscellaneous revenue 196 527
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Total revenues 9,599 13,717
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Operating expenses:
Research and development - pipeline 10,061 10,131
Research and development - specialty and contracted
services 184 1,759
General and administrative 4,627 5,772
General and administrative - contracted services 54 421
Restructuring charge 674 710
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Total operating expenses 15,600 18,793
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Operating loss (6,001) (5,076)
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Other income (expense):
Investment income, net 386 811
Interest expense (1,479) (1,480)
Other, net 31 (31)
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Total other expense (1,062) (700)
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Loss from continuing operations, before income tax
expense (benefit) (7,063) (5,776)
Income tax expense (benefit) 5 (205)
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Loss from continuing operations (7,068) (5,571)
Loss from discontinued operations, net of income tax - (51)
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Net loss $ (7,068) $ (5,622)
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Loss per common share
Basic and diluted $ (0.13) $ (0.09)
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Weighted average shares - basic and diluted 53,054 60,849
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ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
June 30, 2011 December 31, 2010
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ASSETS
Current assets:
Cash and cash equivalents $ 317,867 $ 397,530
Short-term investments 41,083 31,170
Other current assets 4,189 5,916
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Total current assets 363,139 434,616
Property and equipment, net 19,485 21,574
Marketable securities 3,316 31,394
Other assets 759 1,273
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Total assets $ 386,699 $ 488,857
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,430 $ 4,192
Accrued expenses and other 11,050 14,195
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Total current liabilities 12,480 18,387
Notes payable 134,499 134,499
Other liabilities 4,266 4,114
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Total liabilities 151,245 157,000
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Stockholders' equity 235,454 331,857
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Total liabilities and stockholders'
equity $ 386,699 $ 488,857
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Common shares outstanding 50,632 58,818
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Investor Contact:Andrea Rabney Argot Partners 212.600.1902 Email Contact Media Contact:Meghan Feeks Argot Partners 212.600.1902 Email Contact
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