SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 21, 2001
ENZON, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-12957 22-2372868
(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) Identification)
20 Kingsbridge Road, Piscataway, New Jersey 08854
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (732) 980-4500
NA
(Former name or former address, if changed since last report
Item 5. Other Events
On August 21, 2001, Enzon, Inc. ("Enzon") reported that net income of $3.3
million or $0.08 per diluted share for the fourth quarter of fiscal year (FY)
ended June 30, 2001, as compared to a net loss of $1.2 million or $0.03 per
diluted share for the same period in FY 2000. The increase in earnings for the
quarter was principally due to increased royalties from marketed products that
utilize Enzon's PEG technology.
Royalties earned on sales of products, which utilize Enzon's PEG
technology, increased to $4.5 million during the fourth quarter of FY 2001, as
compared to $34,000 for the same period in FY 2000. The increase was primarily
due to royalties earned on sales of PEG-INTRON(TM) by our marketing partner,
Schering-Plough Corporation. The European Union granted PEG-INTRON marketing
authorization as a monotherapy in May 2000 and as a combination therapy with
REBETOL(R) in March 2001 for the treatment of chronic hepatitis C. Additionally,
in February 2001, Schering-Plough launched PEG-INTRON in the United States as a
once-weekly monotherapy for the treatment of hepatitis C. PEG-INTRON is the
first and only pegylated interferon monotherapy approved for marketing in the
United States. In August 2001, the U.S. Food and Drug Administration approved
PEG-INTRON for use in combination therapy with REBETOL(R) Capsules for the
treatment of chronic hepatitis C. The PEG-INTRON and REBETOL treatment regimen
is the first and only pegylated interferon-based combination therapy approved in
the United States.
PEG-INTRON is a modified form of Schering-Plough's INTRON(R)A that was
developed using Enzon's PEG technology to have longer-acting properties. Enzon's
PEG technology involves chemically attaching PEG (polyethylene glycol) to
therapeutic proteins or small molecules for the purpose of enhancing therapeutic
value. Under its licensing agreement with Schering-Plough, Enzon is entitled to
royalties on worldwide sales of PEG-INTRON.
Combined sales of Enzon's products ONCASPAR(R) and ADAGEN(R) increased by
38 percent to $5.8 million in the fourth quarter of FY 2001, as compared to the
same period in FY 2000. Sales of ONCASPAR increased by 61 percent to $2.2
million. Increased ONCASPAR sales were the result of the lifting of the FDA
labeling restrictions that had been in place during the prior year's fourth
quarter, related to a previously disclosed manufacturing problem. ADAGEN sales
for the fourth quarter of FY 2001 increased by $734,000 to $3.6 million, as
compared to the fourth quarter of FY 2000.
Cost of sales, as a percentage of sales, decreased to 17 percent, as
compared to 44 percent for the comparable quarter of the previous year. The
decrease was due to the write-off of certain ONCASPAR finished goods during the
prior year's fourth quarter. This write-off was related to Enzon's previously
disclosed ONCASPAR manufacturing problems.
Research and development expenses for the fourth quarter of FY 2001
increased by $1.3 million or 45 percent to $4.2 million as compared to $2.9
million for the fourth quarter of FY 2000. The increase was due primarily to
increased research and development expenditures related to clinical and
preclinical activities for PROTHECAN(R) (PEG-camptothecin), PEG-paclitaxel, and
other PEG products in preclinical development. In May 2001, Enzon began Phase I
clinical trials of PEG-paclitaxel, a PEG modified version of paclitaxel with
prodrug attributes. Phase II clinical trials for Enzon's lead clinical
candidate, PROTHECAN, were initiated in July 2001. Research and development
expenses are expected to continue to increase significantly as PROTHECAN and
PEG-paclitaxel continue to advance in clinical development and additional
compounds enter clinical trials.
Selling, general and administrative expenses for the fourth quarter of FY
2001 increased by $675,000 or 24 percent to $3.6 million, as compared to $2.9
million for the fourth quarter of FY 2000. This increase was primarily due to
increased legal fees, related to increased patent filing and defense costs, and
increased marketing and distribution costs related to ONCASPAR sales.
As of June 30, 2001, Enzon had total cash and interest-bearing investments
of $516 million, as compared to $128 million as of March 31, 2001. The increase
in cash and interest-bearing investments was the result of Enzon's June 2001
placement of $400 million in convertible notes.
For the fiscal year ended June 30, 2001, Enzon's reported net income was
$11.5 million or $0.26 per diluted share, compared to a net loss of $6.3 million
or $0.17 per diluted share for the year ended June 30, 2000. The earnings for FY
2001 were primarily due to increased royalties related to products, which
utilize Enzon's PEG technology.
Except for the historical information herein, the matters discussed in this
Form 8-K include forward-looking statements that may involve a number of risks
and uncertainties. Actual results may vary significantly based upon a number of
factors which are described in the Company's Form 10-K, Form 10-K/A, Form 10-Q's
and Form 8-Ks on file with the SEC,
including without limitation, risks in obtaining and maintaining regulatory
approval for indications and expanded indications, market acceptance of and
continuing demand for Enzon's products and the impact of competitive products
and pricing.
(Financial statements to follow)
ENZON, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Three Months ended June 30, 2001 and 2000
(Unaudited)
June 30, 2001 June 30, 2000
------------- -------------
Revenues:
Net sales $ 5,828,935 $ 4,232,612
Royalties 4,549,337 33,582
Contract revenue 84,924 349,601
------------- -------------
Total revenues 10,463,196 4,615,795
------------- -------------
Costs and expenses:
Cost of sales 1,003,692 1,875,126
Research and development expenses 4,222,177 2,871,078
Selling, general and administrative expenses 3,566,472 2,891,671
------------- -------------
Total costs and expenses 8,792,341 7,637,875
------------- -------------
Operating income (loss) 1,670,855 (3,022,080)
------------- -------------
Other income (expense):
Interest and dividend income 1,981,183 1,860,754
Interest expense (275,049) --
Other (2,725) --
------------- -------------
1,703,409 1,860,754
------------- -------------
Income (loss) before taxes 3,374,264 (1,161,326)
Tax expense 65,956 --
------------- -------------
Net income (loss) $ 3,308,308 ($ 1,161,326)
============= =============
Basic earnings (loss) per common share $ 0.08 ($ 0.03)
============= =============
Diluted earnings (loss) per common share $ 0.08 ($ 0.03)
============= =============
Weighted average number of common
shares outstanding during the period 41,935,820 40,716,468
============= =============
Weighted average number of common
shares and dilutive potential common shares outstanding
during the period 43,956,840 40,716,468
============= =============
ENZON, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Years ended June 30, 2001 and 2000
June 30, 2001 June 30, 2000
------------- -------------
Revenues:
Net sales $ 20,940,633 $ 15,557,906
Royalties 8,254,368 33,582
Contract revenue 2,392,708 1,426,309
------------- -------------
Total revenues 31,587,709 17,017,797
------------- -------------
Costs and expenses:
Cost of sales 3,864,284 4,888,357
Research and development expenses 13,051,714 8,382,772
Selling, general and administrative expenses 11,795,398 12,956,118
------------- -------------
Total costs and expenses 28,711,396 26,227,247
------------- -------------
Operating income (loss) 2,876,313 (9,209,450)
------------- -------------
Other income (expense):
Interest and dividend income 8,401,526 2,943,311
Interest expense (275,049) (4,051)
Other 10,627 (36,274)
------------- -------------
8,137,104 2,902,986
------------- -------------
Income (loss) before taxes 11,013,417 (6,306,464)
Tax benefit 511,647 --
------------- -------------
Net income (loss) $ 11,525,064 ($ 6,306,464)
============= =============
Basic earnings (loss) per common share $ 0.28 ($ 0.17)
============= =============
Diluted earnings (loss) per common share $ 0.26 ($ 0.17)
============= =============
Weighted average number of common
shares outstanding during the period 41,602,104 38,172,515
============= =============
Weighted average number of common
shares and dilutive potential common shares outstanding
during the period 43,606,194 38,172,515
============= =============
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: August 21, 2001
ENZON, INC.
-----------------------------------------
(Registrant)
By: /s/ KENNETH J. ZUERBLIS
-----------------------------------------
Kenneth J. Zuerblis
Vice President, Finance, Chief Financial
Officer and Corporate Secretary