UNITED STATES
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 17, 2004
ENZON PHARMACEUTICALS, 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)
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) reported today its results for the
quarter and fiscal year (FY) ended June 30, 2004. For the fourth quarter of FY
2004, the Company reported adjusted net income of 1.2 million or $0.03 per
diluted share, compared with adjusted net income of 23.8 million or $0.55 per
diluted share for the fourth quarter of FY 2003. The Company's adjusted net
income for the fourth quarter of FY 2004 and FY 2003 exclude the impact of
isolated non-cash, non-operating, transactions related to the mutual termination
of its proposed merger with NPS Pharmaceuticals, Inc. (NASDAQ: NPSP) in June
2003. The Company's adjusted net income for the fourth quarter of FY 2004 also
excludes a non-cash charge related to the write-down of Enzon's investment in
Micromet AG (private), which was made in April 2002 in the form of a convertible
note that is due to Enzon in March 2006, and non-cash adjustments primarily
related to an increase the Company's valuation allowance for certain deferred
tax assets. These items are detailed within a reconciliation table presented
later in this release.
On a reported basis, calculated in accordance with U.S. generally accepted
accounting principles (GAAP), the Company reported a net loss of $7.3 million or
$0.17 per diluted share for the fourth quarter of FY 2004, as compared to net
income of $40.6 million or $0.93 per diluted share for the fourth quarter of FY
2003.
Enzon has reported adjusted net income because it believes that adjusted net
income is indicative of the underlying operations of the business and is
relevant to gaining an understanding of the Company's trends and potential
future performance.
Combined product sales for the Company's four internally marketed products
(ABELCET(R), ONCASPAR(R), DEPOCYT(R), and ADAGEN(R)) increased by $4.2 million
or 18% to $27.3 million compared with $23.0 million for the prior year's
comparable quarter. The increase is primarily attributable to increased ABELCET
sales. For the fourth quarter of FY 2004, North American sales of ABELCET were
$17.1 million compared with $14.2 million for the fourth quarter of FY 2003.
Sales of ONCASPAR for the fourth quarter of FY 2004 increased by $1.0 million or
26% to $4.8 million compared with $3.8 for the fourth quarter of FY 2003. The
increase was primarily driven by additional sales and marketing efforts to
support ONCASPAR.
Sales of DEPOCYT were $1.1 million for the fourth quarter of FY 2004, compared
with $1.2 million for the fourth quarter of FY 2003. ADAGEN sales for the fourth
quarter of FY 2004 increased to $4.3 million versus $3.8 million in the fourth
quarter of FY 2003.
During the quarter, the Company recorded $4.1 million in manufacturing revenue
related to the ABELCET business compared with $3.2 million for the fourth
quarter of FY 2003.
Royalties for the fourth quarter of FY 2004 decreased by $8.8 million or 44% to
$11.2 million compared with $20.0 million for the fourth quarter of FY 2003.
Royalties are principally comprised of royalties from sales of PEG-INTRON
marketed by Schering-Plough Corporation (NYSE: SGP). The decrease in royalties
from the prior year is primarily due to the ongoing competition in the pegylated
alpha interferon market.
The Company's investment in research and development increased by $4.0 million
or 65% to $10.1 million in the fourth quarter of FY 2004 compared with $6.1
million for the fourth quarter of FY 2003. The increase over the prior year is
primarily attributable to the advancement of the Company's late-stage product
pipeline, namely Pegamotecan, ATG Fresenius S, and the shared
product development costs with Inex Pharmaceutical Corporation (TSX: IEX) for
Onco TCS, which will now be referred to by the new brand name Marqibo(TM)
(vincristine sulfate liposomes injection).
Selling, general, and administrative expenses increased by $2.0 million or 21%
to $11.8 million in the fourth quarter of FY 2004 versus $9.8 million for the
fourth quarter of FY 2003. The increase over the prior year is primarily
attributable to increased product promotional activities.
During the fourth quarter of FY 2004, the Company recorded tax expense of
approximately $4.3 million compared to a deferred tax benefit of $439,000 for
the fourth quarter of FY 2003.
The Company's cash and investments totaled $186.2 million as of June 30, 2004
compared with $153.3 million as of June 30, 2003. The increase in cash and
investments was primarily the result of cash proceeds of $17.4 million related
to the Company's sale of 880,075 shares of Nektar Therapeutics (Nasdaq: NKTR)
common stock during the quarter ended March 31, 2004 and positive cash flow
provided by the Company's operations. These increases were partially offset by
the payment of $12.0 million to Inex for acquired in-process research and
development related to the acquisition of the North American commercialization
rights to Marqibo(TM) in January 2004.
The following table reconciles the Company's adjusted net income to GAAP net
income for the three months ended June 30, 2004 and 2003:
Three Months Ended
(in thousands)
------------------------
06/30/04 06/30/03
------------------------
GAAP net (loss) income ($7,312) $ 40,552
Adjusted net income data:
Add: write-down of carrying value of note 8,341(1) --
Less: other income, net (2,033)(2) (16,716)(4)
Add: tax provision 2,217(3) --
------- --------
Adjusted net income $ 1,213 $ 23,836
======= ========
1 Adjusted net income for the fourth quarter of FY 2004 excludes the
write-down of Enzon's investment in Micromet AG, which was made in April
2002 in the form of a convertible note that is due in March 2006. The
Company based its decision to write-down the note pursuant to GAAP due to
uncertainty regarding the future realization of the carrying value of the
asset.
2 Adjusted net income for the fourth quarter of FY 2004 excludes
tax-adjusted investment income of $2.0 million related to the change in
the fair value of a derivative hedging instrument entered into as a
protective collar arrangement to reduce the Company's exposure associated
with its 1.5 million shares of NPS common stock (discussed below).
3 Adjusted net income for the fourth quarter of FY 2004 excludes non-cash
adjustments totaling $2.2 million that are primarily related to an
increase in the Company's valuation allowance based on Enzon's belief that
it is likely that it may not be able to utilize a portion of its research
and development tax credits.
4 Adjusted net income for the fourth quarter of FY 2003 excludes tax
adjusted other income related to the $36.0 million termination fee paid to
Enzon in the form of 1.5 million shares of NPS common stock, related to
the termination of the proposed merger between Enzon and NPS in June 2003.
The termination fee is net of costs incurred related to the proposed
merger.
The management of Enzon will be hosting a conference call today, August 17, 2004
at 5:00 PM EDT. All interested parties can access the live call using the
following information:
Domestic Dial-In Number: 877-405-4056
International Dial-In Number: 706-679-3931
Access Code: 9078442
Enzon's conference call will also be webcast in a "listen only" mode via the
Internet at http://audioevent.mshow.com/179837. Additionally, for those parties
unable to listen at the time of Enzon's conference call, a rebroadcast will be
available following the call from Tuesday, August 17, 2004 at approximately 8:30
PM EDT. This rebroadcast will end on Tuesday, August 24, 2004 at midnight. The
rebroadcast may be accessed using the following information:
Domestic Dial-In Number: 800-642-1687
International Dial-In Number: 706-645-9291
Access Code: 9078442
About Enzon
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(R), marketed by Schering-Plough, and ABELCET(R),
ONCASPAR(R), ADAGEN(R), and DEPOCYT(R), marketed in North America by Enzon's
specialized sales force. Enzon's science-focused strategy includes an extensive
drug development program that leverages the Company's macromolecular engineering
technology platforms, including 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 and technologies. Enzon has several drug candidates in various stages
of development, independently and with partners, including Marqibo(TM) (formerly
referred to as Onco TCS), for which a U.S. marketing application is currently
being reviewed by the FDA for the treatment of relapsed aggressive non-Hodgkin's
lymphoma. Further information about Enzon and this press release can be found on
the Company's web site at www.enzon.com.
There are forward-looking statements contained herein that are not based on
historical fact, including without limitation statements containing the words
"believes," "may," "plans," "will," "estimates," "continue," "anticipates,"
"intends," "expects," and similar expressions. An example of this includes the
quoted statement above regarding revenue growth, pipeline advancement and the
identification of strategic opportunities. 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 discussed above. Such factors include:
the risk that Marqibo(TM) (formerly Onco TCS) may not receive regulatory
approval from the FDA under Subpart H of the Food and Drug Act and the fact that
any such approval, if granted, will include post approval commitments; the risks
that any or all of Pegamotecan, SS1P and ATG Fresenius S will not successfully
progress
through clinical studies; and the risk that Enzon will not be able to
successfully conclude any strategic transactions with third parties for the
acquisition of rights to other products; as well as those described in Enzon's
Form 10-K and Forms 10-Q on file with the SEC, such as: risks associated with
Enzon's ability to successfully launch and market Marqibo(TM) and 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; risks regarding market acceptance of and continuing demand for
Enzon's products; rules associated with the timing and results of clinical
trials generally; and the impact of competitive products and pricing. These
factors should be considered carefully and readers are cautioned not to place
undue reliance on such forward-looking statements.
All information in this press release is as of August 17, 2004 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 June 30, 2004 and 2003
(In thousands, except per share data)
(Unaudited)
June 30, 2004 June 30, 2003
------------------------------
Revenues:
Net sales $ 27,258 $ 23,014
Manufacturing revenue 4,084 3,246
Royalties 11,246 20,024
Contract revenue 262 394
-------- --------
Total revenues 42,850 46,678
-------- --------
Costs and expenses:
Cost of sales and manufacturing revenues 11,792 10,662
Research and development expenses 10,058 6,083
Selling, general and administrative expenses 11,814 9,785
Amortization of acquired intangibles 3,358 3,923
Write-down of carrying value of investments 8,341 --
-------- --------
Total costs and expenses 45,363 30,453
-------- --------
Operating (loss) income (2,513) 16,225
-------- --------
Other income (expense):
Investment income, net 652 512
Interest expense (4,957) (4,957)
Other income 3,789 28,333
-------- --------
(516) 23,888
-------- --------
Income (loss) before taxes (3,029) 40,113
Tax provision (benefit) 4,283 (439)
-------- --------
Net (loss) income (7,312) $ 40,552
======== ========
Basic (loss) earnings per common share ($0.17) $ 0.94
======== ========
Diluted (loss) earnings per common share ($0.17) $ 0.93
======== ========
Weighted average number of common shares
issued and outstanding - basic 43,394 43,264
======== ========
Weighted average number of common shares issued
and outstanding and dilutive potential common
shares outstanding 43,394 43,609
======== ========
Enzon Pharmaceuticals, Inc. and Subsidiaries
Consolidated Statements of Operations
Twelve months ended June 30, 2004 and 2003
(In thousands, except per share data)
(Unaudited)
June 30, June 30,
2004 2003
--------- ---------
Revenues:
Net sales $ 107,922 $ 59,264
Manufacturing revenue 12,911 8,742
Royalties 47,707 77,589
Contract revenue 1,031 811
--------- ---------
Total revenues 169,571 146,406
--------- ---------
Costs and expenses:
Cost of sales and manufacturing revenues 46,986 28,521
Research and development expenses 34,769 20,969
Acquired in-process research and development 12,000 --
Selling, general and administrative expenses 47,002 30,571
Amortization of acquired intangibles 13,432 9,211
Write-down of carrying value of investments 8,341 27,237
--------- ---------
Total costs and expenses 162,530 116,509
--------- ---------
Operating income 7,041 29,897
--------- ---------
Other income (expense):
Investment income, net 13,396 8,942
Interest expense (19,828) (19,828)
Other income 3,860 26,938
--------- ---------
(2,572) 16,052
--------- ---------
Income before taxes 4,469 45,949
Tax provision 1,592 223
--------- ---------
Net income $ 2,877 $ 45,726
========= =========
Basic earnings per common share $ 0.07 $ 1.06
========= =========
Diluted earnings per common share $ 0.07 $ 1.05
========= =========
Weighted average number of common shares
issued and outstanding - basic 43,350 43,116
========= =========
Weighted average number of common shares
issued and outstanding and dilutive potential
common shares outstanding 43,522 43,615
========= =========
Enzon Pharmaceuticals, Inc. and Subsidiaries
Consolidated Condensed Balance Sheets
June 30, 2004 and June 30, 2003
(In thousands, except share data)
(Unaudited)
June 30, 2004 June 30, 2003
------------- -------------
Assets
Current assets:
Cash and short-term investments $118,652 $ 91,799
Accounts receivable, net 25,977 33,173
Inventory 11,215 11,786
Other current assets 13,402 16,089
-------- --------
Total current assets 169,246 152,847
Property and equipment, net 34,859 32,593
-------- --------
Other assets:
Marketable securities 67,582 61,451
Other long-term assets 465,034 481,675
-------- --------
532,616 543,126
-------- --------
Total assets $736,721 $728,566
======== ========
Liabilities and Stockholders' Equity
Current and other liabilities $ 47,435 $ 36,982
Notes payable 400,000 400,000
Stockholders' equity 289,286 291,584
-------- --------
Total liabilities and stockholders' equity $736,721 $728,566
======== ========
Common shares outstanding 43,838 43,518
======== ========
Item 12. Results of Operations and Financial Condition
On August 17, 2004, Enzon Pharmaceuticals, Inc. issued a press release to report
its results of operations and financial condition for the completed fiscal
quarter ended June 30, 2004. 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: August 17, 2004
By: /s/ Kenneth J. Zuerblis
------------------------------------
Kenneth J. Zuerblis
Vice President, Finance and
Chief Financial Officer
Exhibit 99.1
[LOGO] ENZON PHARMACEUTICALS For Immediate Release
================================================================================
PRESS RELEASE
Contact: Kenneth J. Zuerblis
VP Finance & CFO
908-541-8717
Euro RSCG Life NRP
Mark R. Vincent, Media Relations
212-845-4239
ENZON REPORTS FOURTH QUARTER AND FISCAL YEAR RESULTS
- Fourth Quarter Product Sales Increase 18% over Prior Year -
BRIDGEWATER, NJ -- August 17, 2004 -- Enzon Pharmaceuticals, Inc. (Nasdaq: ENZN)
reported today its results for the quarter and fiscal year (FY) ended June 30,
2004. For the fourth quarter of FY 2004, the Company reported adjusted net
income of 1.2 million or $0.03 per diluted share, compared with adjusted net
income of 23.8 million or $0.55 per diluted share for the fourth quarter of FY
2003. The Company's adjusted net income for the fourth quarter of FY 2004 and FY
2003 exclude the impact of isolated non-cash, non-operating, transactions
related to the mutual termination of its proposed merger with NPS
Pharmaceuticals, Inc. (NASDAQ: NPSP) in June 2003. The Company's adjusted net
income for the fourth quarter of FY 2004 also excludes a non-cash charge related
to the write-down of Enzon's investment in Micromet AG (private), which was made
in April 2002 in the form of a convertible note that is due to Enzon in March
2006, and non-cash adjustments primarily related to an increase the Company's
valuation allowance for certain deferred tax assets. These items are detailed
within a reconciliation table presented later in this release.
On a reported basis, calculated in accordance with U.S. generally accepted
accounting principles (GAAP), the Company reported a net loss of $7.3 million or
$0.17 per diluted share for the fourth quarter of FY 2004, as compared to net
income of $40.6 million or $0.93 per diluted share for the fourth quarter of FY
2003.
Enzon has reported adjusted net income because it believes that adjusted net
income is indicative of the underlying operations of the business and is
relevant to gaining an understanding of the Company's trends and potential
future performance.
"Fiscal 2004 has been a year of solid execution for Enzon with all elements of
our business that we control performing at or ahead of our expectations," said
Arthur J. Higgins, Enzon's chairman. "Today Enzon is financially strong with a
promising product pipeline. I am confident Enzon will utilize its strong
organizational momentum to drive revenue growth, advance its product pipeline,
and identify new strategic opportunities for continued forward progress in
fiscal 2005."
================================================================================
685 Route 202/206
Phone: (908) 541-8600 Fax: (908) 575-9457
http://www.enzon.com
Combined product sales for the Company's four internally marketed products
(ABELCET(R), ONCASPAR(R), DEPOCYT(R), and ADAGEN(R)) increased by $4.2 million
or 18% to $27.3 million compared with $23.0 million for the prior year's
comparable quarter. The increase is primarily attributable to increased ABELCET
sales. For the fourth quarter of FY 2004, North American sales of ABELCET were
$17.1 million compared with $14.2 million for the fourth quarter of FY 2003.
Sales of ONCASPAR for the fourth quarter of FY 2004 increased by $1.0 million or
26% to $4.8 million compared with $3.8 for the fourth quarter of FY 2003. The
increase was primarily driven by additional sales and marketing efforts to
support ONCASPAR.
Sales of DEPOCYT were $1.1 million for the fourth quarter of FY 2004, compared
with $1.2 million for the fourth quarter of FY 2003. ADAGEN sales for the fourth
quarter of FY 2004 increased to $4.3 million versus $3.8 million in the fourth
quarter of FY 2003.
During the quarter, the Company recorded $4.1 million in manufacturing revenue
related to the ABELCET business compared with $3.2 million for the fourth
quarter of FY 2003.
Royalties for the fourth quarter of FY 2004 decreased by $8.8 million or 44% to
$11.2 million compared with $20.0 million for the fourth quarter of FY 2003.
Royalties are principally comprised of royalties from sales of PEG-INTRON
marketed by Schering-Plough Corporation (NYSE: SGP). The decrease in royalties
from the prior year is primarily due to the ongoing competition in the pegylated
alpha interferon market.
The Company's investment in research and development increased by $4.0 million
or 65% to $10.1 million in the fourth quarter of FY 2004 compared with $6.1
million for the fourth quarter of FY 2003. The increase over the prior year is
primarily attributable to the advancement of the Company's late-stage product
pipeline, namely Pegamotecan, ATG Fresenius S, and the shared product
development costs with Inex Pharmaceutical Corporation (TSX: IEX) for Onco TCS,
which will now be referred to by the new brand name Marqibo(TM) (vincristine
sulfate liposomes injection).
Selling, general, and administrative expenses increased by $2.0 million or 21%
to $11.8 million in the fourth quarter of FY 2004 versus $9.8 million for the
fourth quarter of FY 2003. The increase over the prior year is primarily
attributable to increased product promotional activities.
During the fourth quarter of FY 2004, the Company recorded tax expense of
approximately $4.3 million compared to a deferred tax benefit of $439,000 for
the fourth quarter of FY 2003.
The Company's cash and investments totaled $186.2 million as of June 30, 2004
compared with $153.3 million as of June 30, 2003. The increase in cash and
investments was primarily the result of cash proceeds of $17.4 million related
to the Company's sale of 880,075 shares of Nektar Therapeutics (Nasdaq: NKTR)
common stock during the quarter ended March 31, 2004 and positive cash flow
provided by the Company's operations. These increases were partially offset by
the payment of $12.0 million to Inex for acquired in-process research and
development related to the acquisition of the North American commercialization
rights to Marqibo(TM) in January 2004.
================================================================================
685 Route 202/206
Phone: (908) 541-8600 Fax: (908) 575-9457
http://www.enzon.com
The following table reconciles the Company's adjusted net income to GAAP net
income for the three months ended June 30, 2004 and 2003:
Three Months Ended
(in thousands)
---------------------------
06/30/04 06/30/03
------- --------
GAAP net (loss) income ($7,312) $ 40,552
Adjusted net income data:
Add: write-down of carrying value of note 8,341(1) --
Less: other income, net (2,033)(2) (16,716)(4)
Add: tax provision 2,217(3) --
------- --------
Adjusted net income $ 1,213 $ 23,836
======= ========
1 Adjusted net income for the fourth quarter of FY 2004 excludes the
write-down of Enzon's investment in Micromet AG, which was made in
April 2002 in the form of a convertible note that is due in March
2006. The Company based its decision to write-down the note pursuant
to GAAP due to uncertainty regarding the future realization of the
carrying value of the asset.
2 Adjusted net income for the fourth quarter of FY 2004 excludes
tax-adjusted investment income of $2.0 million related to the change
in the fair value of a derivative hedging instrument entered into as
a protective collar arrangement to reduce the Company's exposure
associated with its 1.5 million shares of NPS common stock
(discussed below).
3 Adjusted net income for the fourth quarter of FY 2004 excludes
non-cash adjustments totaling $2.2 million related to an increase in
the Company's valuation allowance based on Enzon's belief that it is
likely that it may not be able to utilize a portion of its research
and development tax credits.
4 Adjusted net income for the fourth quarter of FY 2003 tax adjusted
excludes other income related to the $36.0 million termination fee
paid to Enzon in the form of 1.5 million shares of NPS common stock,
related to the termination of the proposed merger between Enzon and
NPS in June 2003. The termination fee is net of costs incurred
related to the proposed merger.
================================================================================
685 Route 202/206
Phone: (908) 541-8600 Fax: (908) 575-9457
http://www.enzon.com
The management of Enzon will be hosting a conference call today, August 17, 2004
at 5:00 PM EDT. All interested parties can access the live call using the
following information:
Domestic Dial-In Number: 877-405-4056
International Dial-In Number: 706-679-3931
Access Code: 9078442
Enzon's conference call will also be webcast in a "listen only" mode via the
Internet at http://audioevent.mshow.com/179837. Additionally, for those parties
unable to listen at the time of Enzon's conference call, a rebroadcast will be
available following the call from Tuesday, August 17, 2004 at approximately 8:30
PM EDT. This rebroadcast will end on Tuesday, August 24, 2004 at midnight. The
rebroadcast may be accessed using the following information:
Domestic Dial-In Number: 800-642-1687
International Dial-In Number: 706-645-9291
Access Code: 9078442
About Enzon
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(R), marketed by Schering-Plough, and ABELCET(R),
ONCASPAR(R), ADAGEN(R), and DEPOCYT(R), marketed in North America by Enzon's
specialized sales force. Enzon's science-focused strategy includes an extensive
drug development program that leverages the Company's macromolecular engineering
technology platforms, including 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 and technologies. Enzon has several drug candidates in various stages
of development, independently and with partners, including Marqibo(TM) (formerly
referred to as Onco TCS), for which a U.S. marketing application is currently
being reviewed by the FDA for the treatment of relapsed aggressive non-Hodgkin's
lymphoma. Further information about Enzon and this press release can be found on
the Company's web site at www.enzon.com.
There are forward-looking statements contained herein that are not based on
historical fact, including without limitation statements containing the words
"believes," "may," "plans," "will," "estimates," "continue," "anticipates,"
"intends," "expects," and similar expressions. An example of this includes the
quoted statement above regarding revenue growth, pipeline advancement and the
identification of strategic opportunities. 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 discussed above. Such factors include:
the risk that Marqibo(TM) (formerly Onco TCS) may not receive regulatory
approval from the FDA under Subpart H of the Food and Drug Act and the fact that
any such approval, if granted, will include post approval commitments; the risks
that any or all of Pegamotecan, SS1P and ATG Fresenius S will not successfully
progress
================================================================================
685 Route 202/206
Phone: (908) 541-8600 Fax: (908) 575-9457
http://www.enzon.com
through clinical studies; and the risk that Enzon will not be able to
successfully conclude any strategic transactions with third parties for the
acquisition of rights to other products; as well as those described in Enzon's
Form 10-K and Forms 10-Q on file with the SEC, such as: risks associated with
Enzon's ability to successfully launch and market Marqibo(TM) and 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; risks regarding market acceptance of and continuing demand for
Enzon's products; risks associated with the timing and results of clinical
trials generally; and the impact of competitive products and pricing. These
factors should be considered carefully and readers are cautioned not to place
undue reliance on such forward-looking statements.
All information in this press release is as of August 17, 2004 and the Company
undertakes no duty to update this information.
(Financial statements to follow)
================================================================================
685 Route 202/206
Phone: (908) 541-8600 Fax: (908) 575-9457
http://www.enzon.com
Enzon Pharmaceuticals, Inc. and Subsidiaries
Consolidated Statements of Operations
Three Months ended June 30, 2004 and 2003
(In thousands, except per share data)
(Unaudited)
June 30, 2004 June 30, 2003
------------------------------
Revenues:
Net sales $ 27,258 $ 23,014
Manufacturing revenue 4,084 3,246
Royalties 11,246 20,024
Contract revenue 262 394
-------- --------
Total revenues 42,850 46,678
-------- --------
Costs and expenses:
Cost of sales and manufacturing revenues 11,792 10,662
Research and development expenses 10,058 6,083
Selling, general and administrative expenses 11,814 9,785
Amortization of acquired intangibles 3,358 3,923
Write-down of carrying value of investments 8,341 --
-------- --------
Total costs and expenses 45,363 30,453
-------- --------
Operating (loss) income (2,513) 16,225
-------- --------
Other income (expense):
Investment income, net 652 512
Interest expense (4,957) (4,957)
Other income 3,789 28,333
-------- --------
(516) 23,888
-------- --------
Income (loss) before taxes (3,029) 40,113
Tax provision (benefit) 4,283 (439)
-------- --------
Net (loss) income (7,312) $ 40,552
======== ========
Basic (loss) earnings per common share ($0.17) $ 0.94
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Diluted (loss) earnings per common share ($0.17) $ 0.93
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Weighted average number of common shares
issued and outstanding - basic 43,394 43,264
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Weighted average number of common shares issued
and outstanding and dilutive potential common
shares outstanding 43,394 43,609
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685 Route 202/206
Phone: (908) 541-8600 Fax: (908) 575-9457
http://www.enzon.com
Enzon Pharmaceuticals, Inc. and Subsidiaries
Consolidated Statements of Operations
Twelve months ended June 30, 2004 and 2003
(In thousands, except per share data)
(Unaudited)
June 30, June 30,
2004 2003
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Revenues:
Net sales $ 107,922 $ 59,264
Manufacturing revenue 12,911 8,742
Royalties 47,707 77,589
Contract revenue 1,031 811
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Total revenues 169,571 146,406
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Costs and expenses:
Cost of sales and manufacturing revenues 46,986 28,521
Research and development expenses 34,769 20,969
Acquired in-process research and development 12,000 --
Selling, general and administrative expenses 47,002 30,571
Amortization of acquired intangibles 13,432 9,211
Write-down of carrying value of investments 8,341 27,237
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Total costs and expenses 162,530 116,509
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Operating income 7,041 29,897
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Other income (expense):
Investment income, net 13,396 8,942
Interest expense (19,828) (19,828)
Other income 3,860 26,938
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(2,572) 16,052
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Income before taxes 4,469 45,949
Tax provision 1,592 223
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Net income $ 2,877 $ 45,726
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Basic earnings per common share $ 0.07 $ 1.06
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Diluted earnings per common share $ 0.07 $ 1.05
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Weighted average number of common shares
issued and outstanding - basic 43,350 43,116
========= =========
Weighted average number of common shares
issued and outstanding and dilutive potential
common shares outstanding 43,522 43,615
========= =========
================================================================================
685 Route 202/206
Phone: (908) 541-8600 Fax: (908) 575-9457
http://www.enzon.com
Enzon Pharmaceuticals, Inc. and Subsidiaries
Consolidated Condensed Balance Sheets
June 30, 2004 and June 30, 2003
(In thousands, except share data)
(Unaudited)
June 30, 2004 June 30, 2003
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Assets
Current assets:
Cash and short-term investments $118,652 $ 91,799
Accounts receivable, net 25,977 33,173
Inventory 11,215 11,786
Other current assets 13,402 16,089
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Total current assets 169,246 152,847
Property and equipment, net 34,859 32,593
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Other assets:
Marketable securities 67,582 61,451
Other long-term assets 465,034 481,675
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532,616 543,126
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Total assets $736,721 $728,566
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Liabilities and Stockholders' Equity
Current and other liabilities $ 47,435 $ 36,982
Notes payable 400,000 400,000
Stockholders' equity 289,286 291,584
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Total liabilities and stockholders' equity $736,721 $728,566
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Common shares outstanding 43,838 43,518
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###
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685 Route 202/206
Phone: (908) 541-8600 Fax: (908) 575-9457
http://www.enzon.com