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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): November 6, 2003
ENZON PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-12957 22-2372868
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification)
685 Route 202/206, Bridgewater, New Jersey 08807
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code: (908) 541-8600
--------------------------------------------------------------------------
(Former name or former address, if changed since last report)
Item 5. Other Events
Enzon Pharmaceuticals, Inc. (NASDAQ:ENZN) announced today its financial results
for the first quarter of fiscal year 2004 ended September 30, 2003. The
company's net income per share for the first quarter of fiscal 2004 was $2.8
million or $0.06 cents per diluted share, versus $12.8 million or $0.29 cents
per diluted share for the first quarter of fiscal 2003. The decrease in net
income was principally due to decreased royalties from Schering-Plough's
PEG-INTRON(R) due to the introduction of a competitive product and increased
research and development spending related to the advancement of the company's
two late stage development candidates. The decrease was also due to increased
income tax expense as the company is now required under GAAP to report fully
taxed earnings, because the company previously recognized the tax benefits
attributable to its approximately $130 million in federal net operating loss
carry forwards. These net operating loss carry forwards remain available to
offset income tax payments for the next two to three years.
Total revenue in the first quarter of fiscal 2004 was $40.6 million as compared
to $25.1 million in the first quarter of fiscal 2003, resulting in a 62 percent
increase. This increase was primarily driven by net sales and manufacturing
revenue of $16.6 million related to the ABELCET(R) business, which the company
acquired in November 2002.
For the three months ended September 30, 2003, combined sales of the company's
other three marketed products ADAGEN(R), ONCASPAR(R), and DEPOCYT(R) were $10
million, a 52 percent increase over sales of $6.6 million in the first quarter
of fiscal 2003. ADAGEN sales for the first quarter of fiscal 2004 were $4.6
million versus $3.8 million in the first quarter of fiscal 2003, a 21 percent
increase. Sales of ONCASPAR for the first quarter of fiscal 2004 were $4.1
million, a 48 percent increase over sales of $2.8 million in the first quarter
of fiscal 2003. Fiscal 2004 first quarter sales of DEPOCYT, marketed through
Enzon's specialty sales force, were $1.3 million. The company in-licensed the
North American rights to DEPOCYT in January 2003.
Total royalties for the first quarter of fiscal 2004 were $13.8 million, a 25
percent decrease from royalties of $18.4 million for the first quarter of fiscal
2003. Total royalties for the quarter were made up principally of royalties from
sales of PEG-INTRON marketed by Schering-Plough.
Research and development expenses increased to $6.6 million in the first quarter
of fiscal 2004 from $4.1 million in the same quarter of fiscal 2003. The
increase was due to the continued advancement of the company's two late stage
compounds, PEG-Camptothecin and ATG Fresenius S, as well as progress in the
company's early stage programs.
SG&A expense increased to $11.2 million in the first quarter of fiscal 2004
versus $3.9 million for the first quarter of fiscal 2003 due to the addition of
two sales forces that market ABELCET, DEPOCYT AND ONCASPAR.
The management of Enzon will be hosting a conference call today, November 6,
2003 at 5:00 PM EDT. All interested parties can access the live call using the
following information:
Domestic Dial-In Number: 800-553-0351
International Dial-In Number: 612-288-0318
Access Code: 702254
Enzon's conference call will also be webcast in a "listen only" mode via the
Internet at http://www.vcall.com. Additionally, for those parties unable to
listen at the time of Enzon's conference call, a rebroadcast will be available
following the call from Thursday, November 6, 2003 at approximately 10:15pm.
This rebroadcast will end on Thursday, November 13, 2003 at midnight. The
rebroadcast may be accessed using the following information:
Domestic Dial-In Number: 800-475-6701
International Dial-In Number: 320-365-3844
Access Code 702254
Enzon Pharmaceuticals is a biopharmaceutical company dedicated to the discovery,
development and commercialization of therapeutics to treat life-threatening
diseases. The company has developed or acquired a number of marketed products,
including PEG-INTRON, marketed by Schering-Plough, and ABELCET, which is
marketed in North America by Enzon. Enzon's science-focused strategy includes an
extensive drug development program that leverages the Company's PEG modification
and single-chain antibody (SCA(R)) technologies. Internal research and
development efforts are complemented by strategic transactions that provide
access to additional products, projects, and technologies. Enzon has several
drug candidates in various stages of development, independently and with
partners.
Except for the historical information herein, the matters discussed in this news
release 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-Q's and Form
8-K's on file with the SEC, including without limitation, Enzon's ability to
continue to increase ABELCET's share of the antifungal market and to sustain
such increased market share and to successfully market its proprietary products;
Enzon's dependence on Schering-Plough's effective marketing of PEG-INTRON;
Enzon's ability to clinically advance its PEG-Camptothecin and ATG-Fresenius S
programs; Enzon's ability to sustain profitability and positive cash flow; risks
in obtaining and maintaining regulatory approval for indications and expanded
indications for Enzon's products; market acceptance of and continuing demand for
Enzon's products; timing and results of clinical trials and the impact of
competitive products and pricing. All information in this press release is as of
November 6, 2003, and the Company undertakes no duty to update this information.
# # #
(Financial statements to follow)
ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months ended September 30, 2003 and 2002 (Unaudited)
September 30, September 30,
2003 2002
----------------------------
Revenues:
Net sales $ 24,961 $ 6,566
Manufacturing Revenue 1,604 --
Royalties 13,811 18,417
Contract revenue 268 84
--------- ---------
Total revenues 40,644 25,067
--------- ---------
Costs and expenses:
Cost of sales and manufacturing revenue 10,912 2,514
Research and development expenses 6,551 4,062
Selling, general and administrative expenses 11,209 3,908
Amortization of acquired intangibles 3,358 35
--------- ---------
Total costs and expenses 32,030 10,519
--------- ---------
Operating income 8,614 14,548
--------- ---------
Other income (expense):
Investment income, net 474 3,454
Interest expense (4,957) (4,957)
Other income 307 --
--------- ---------
(4,176) (1,503)
--------- ---------
Income before taxes 4,438 13,045
Income tax provision 1,634 261
--------- ---------
Net income $ 2,804 $ 12,784
========= =========
Basic earnings per common share $ 0.06 $ 0.30
========= =========
Diluted earnings per common share $ 0.06 $ 0.29
========= =========
Weighted average number of common shares issued
and outstanding - basic 43,290 42,980
========= =========
Weighted average number of common shares issued
and outstanding and dilutive potential common
shares outstanding 43,629 43,681
========= =========
12. Results of Operations and Financial Condition
On November 6, 2003, Enzon Pharmaceuticals, Inc. issued a press release to
report its results of operations and financial condition for first quarter of
fiscal year (FY) 2004 ended September 30, 2003. A copy of this press release is
included as Exhibit 99.1 to this Form 8-K and incorporated into this Item 12 by
reference.
The information in this Item 12, including Exhibit 99.1, is being furnished and
shall not be deemed to be "filed" for purposes of Section 18 of the Securities
Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liability
of that Section, nor shall such information be deemed to be incorporated by
reference in any registration statement or other document filed under the
Securities Act of 1933 or the Exchange Act, except as otherwise stated in such
filing.
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: November 6, 2003
By: /s/ Kenneth J. Zuerblis
---------------------------
Kenneth J. Zuerblis
Vice President, Finance and
Chief Financial Office
Exhibit 99.1
ENZON
PHARMACEUTICALS For Immediate Release
================================================================================
PRESS RELEASE
Contact: Kenneth J. Zuerblis
Vice President, Finance & CFO
908-541-8717
Euro RSCG Life NRP
Mark R. Vincent, Media Relations
212-845-4239
ENZON REPORTS FIRST QUARTER RESULTS
STRONG SALES MOMENTUM FOR ABELCET(R) AND
ALL OTHER PROPRIETARY PRODUCTS MARKETED BY ENZON
BRIDGEWATER, NJ - November 6, 2003 - Enzon Pharmaceuticals, Inc.
(NASDAQ:ENZN) announced today its financial results for the first quarter of
fiscal year 2004 ended September 30, 2003. The company's net income per share
for the first quarter of fiscal 2004 was $2.8 million or $0.06 cents per diluted
share, versus $12.8 million or $0.29 cents per diluted share for the first
quarter of fiscal 2003. The decrease in net income was principally due to
decreased royalties from Schering-Plough's PEG-INTRON(R) due to the introduction
of a competitive product and increased research and development spending related
to the advancement of the company's two late stage development candidates. The
decrease was also due to increased income tax expense as the company is now
required under GAAP to report fully taxed earnings, because the company
previously recognized the tax benefits attributable to its approximately $130
million in federal net operating loss carry forwards. These net operating loss
carry forwards remain available to offset income tax payments for the next two
to three years.
Total revenue in the first quarter of fiscal 2004 was $40.6 million as
compared to $25.1 million in the first quarter of fiscal 2003, resulting in a 62
percent increase. This increase was primarily driven by net sales and
manufacturing revenue of $16.6 million related to the ABELCET(R) business, which
the company acquired in November 2002.
For the three months ended September 30, 2003, combined sales of the
company's other three marketed products ADAGEN(R), ONCASPAR(R), and DEPOCYT(R)
were $10 million, a 52 percent increase over sales of $6.6 million in the first
quarter of fiscal 2003. ADAGEN sales for
the first quarter of fiscal 2004 were $4.6 million versus $3.8 million in the
first quarter of fiscal 2003, a 21 percent increase. Sales of ONCASPAR for the
first quarter of fiscal 2004 were $4.1 million, a 48 percent increase over sales
of $2.8 million in the first quarter of fiscal 2003. Fiscal 2004 first quarter
sales of DEPOCYT, marketed through Enzon's specialty sales force, were $1.3
million. The company in-licensed the North American rights to DEPOCYT in January
2003.
Total royalties for the first quarter of fiscal 2004 were $13.8 million, a
25 percent decrease from royalties of $18.4 million for the first quarter of
fiscal 2003. Total royalties for the quarter were made up principally of
royalties from sales of PEG-INTRON marketed by Schering-Plough.
Research and development expenses increased to $6.6 million in the first
quarter of fiscal 2004 from $4.1 million in the same quarter of fiscal 2003. The
increase was due to the continued advancement of the company's two late stage
compounds, PEG-Camptothecin and ATG Fresenius S, as well as progress in the
company's early stage programs.
"All components of our business that we control perform at or better than
our expectations," said Arthur J. Higgins, Chairman and Chief Executive Officer
of Enzon Pharmaceuticals, Inc. "To highlight the progress in our pipeline we
will hold our first Investor R&D Day on November 20th."
SG&A expense increased to $11.2 million in the first quarter of fiscal
2004 versus $3.9 million for the first quarter of fiscal 2003 due to the
addition of two sales forces that market ABELCET, DEPOCYT AND ONCASPAR.
The management of Enzon will be hosting a conference call today, November
6, 2003 at 5:00 PM EDT. All interested parties can access the live call using
the following information:
Domestic Dial-In Number: 800-553-0351
International Dial-In Number: 612-288-0318
Access Code: 702254
Enzon's conference call will also be webcast in a "listen only" mode via the
Internet at http://www.vcall.com. Additionally, for those parties unable to
listen at the time of Enzon's conference call, a rebroadcast will be available
following the call from Thursday, November 6, 2003 at approximately 10:15pm.
This rebroadcast will end on Thursday, November 13, 2003 at midnight. The
rebroadcast may be accessed using the following information:
Domestic Dial-In Number: 800-475-6701
International Dial-In Number: 320-365-3844
Access Code 702254
Enzon Pharmaceuticals is a biopharmaceutical company dedicated to the
discovery, development and commercialization of therapeutics to treat
life-threatening diseases. The company has developed or acquired a number of
marketed products, including PEG-INTRON, marketed by Schering-Plough, and
ABELCET, which is marketed in North America by Enzon. Enzon's science-focused
strategy includes an extensive drug development program that leverages the
Company's PEG modification and single-chain antibody (SCA(R)) technologies.
Internal research and development efforts are complemented by strategic
transactions that provide access to additional products, projects, and
technologies. Enzon has several drug candidates in various stages of
development, independently and with partners.
Except for the historical information herein, the matters discussed in
this news release 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-Q's
and Form 8-K's on file with the SEC, including without limitation, Enzon's
ability to continue to increase ABELCET's share of the antifungal market and to
sustain such increased market share and to successfully market its proprietary
products; Enzon's dependence on Schering-Plough's effective marketing of
PEG-INTRON; Enzon's ability to clinically advance its PEG-Camptothecin and
ATG-Fresenius S programs; Enzon's ability to sustain profitability and positive
cash flow; risks in obtaining and maintaining regulatory approval for
indications and expanded indications for Enzon's products; market acceptance of
and continuing demand for Enzon's products; timing and results of clinical
trials and the impact of competitive products and pricing. All information in
this press release is as of November 6, 2003, and the Company undertakes no duty
to update this information.
For further information regarding this press release, please go to Enzon's
website homepage at http://www.enzon.com and to Enzon's Investor Relations
webpage at http://enzon.com/shareholders.html.
# # #
(Financial statements to follow)
ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months ended September 30, 2003 and 2002 (Unaudited)
September 30, September 30,
2003 2002
----------------------------
Revenues:
Net sales $ 24,961 $ 6,566
Manufacturing Revenue 1,604 --
Royalties 13,811 18,417
Contract revenue 268 84
--------- ---------
Total revenues 40,644 25,067
--------- ---------
Costs and expenses:
Cost of sales and manufacturing revenue 10,912 2,514
Research and development expenses 6,551 4,062
Selling, general and administrative expenses 11,209 3,908
Amortization of acquired intangibles 3,358 35
--------- ---------
Total costs and expenses 32,030 10,519
--------- ---------
Operating income 8,614 14,548
--------- ---------
Other income (expense):
Investment income, net 474 3,454
Interest expense (4,957) (4,957)
Other income 307 --
--------- ---------
(4,176) (1,503)
--------- ---------
Income before taxes 4,438 13,045
Income tax provision 1,634 261
--------- ---------
Net income $ 2,804 $ 12,784
========= =========
Basic earnings per common share $ 0.06 $ 0.30
========= =========
Diluted earnings per common share $ 0.06 $ 0.29
========= =========
Weighted average number of common shares issued
and outstanding - basic 43,290 42,980
========= =========
Weighted average number of common shares issued
and outstanding and dilutive potential common
shares outstanding 43,629 43,681
========= =========
###