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UNITED STATES |
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SECURITIES AND EXCHANGE COMMISSION |
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Washington, D.C. 20549 |
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Form 8-K |
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CURRENT REPORT |
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Pursuant
to Section 13 or 15(d) of the |
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Date of Report (Date of earliest event reported): August 4, 2011 |
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ENZON PHARMACEUTICALS, INC. |
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(Exact name of registrant as specified in its charter) |
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Delaware |
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(State or other jurisdiction of incorporation) |
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0-12957 |
22-2372868 |
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(Commission File Number) |
(IRS Employer Identification No.) |
20 Kingsbridge Road
Piscataway, New Jersey 08854
(Address of Principal
Executive Offices)
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Registrant’s telephone number, including area code (732) 980-4500 |
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: |
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Written communications pursuant to Rule 425 under the Securities Act (16 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (16 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (16 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (16 CFR 240.13e-4(c) |
Item 2.02 Results of Operations and Financial Condition.
On August 4, 2011, Enzon Pharmaceuticals, Inc. issued a press release reporting certain financial and other information for the quarter ended June 30, 2011. A copy of the press release is attached as Exhibit 99.1 to this Current Report and is incorporated by reference into this Item 2.02.
The information in this Item 2.02, 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, as amended (the “Exchange Act”), or otherwise subject to the liability of that Section, nor shall such information be deemed to be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise stated in that filing.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
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Exhibit No. |
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Description |
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99.1 |
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Press Release of Enzon Pharmaceuticals, Inc. dated August 4, 2011 |
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.
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ENZON PHARMACEUTICALS, INC. |
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By: |
/s/ Andrew Rackear |
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Name: Andrew Rackear |
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Title: Vice President and General Counsel |
Exhibit 99.1
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For Immediate Release |
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Investor Contact: |
Andrea Rabney |
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Argot Partners |
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212.600.1902 |
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andrea@argotpartners.com |
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Media Contact: |
Meghan Feeks |
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Argot Partners |
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212.600.1902 |
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meghan@argotpartners.com |
ENZON REPORTS 2nd QUARTER 2011 RESULTS
PISCATAWAY, NJ – August 4, 2011 – Enzon Pharmaceuticals, Inc. (Nasdaq: ENZN) today announced its financial results for the second quarter of 2011. For the second quarter of 2011, Enzon reported a loss from continuing operations of $7.1 million, or $0.13 diluted loss per share, as compared to a loss from continuing operations of $5.6 million, or $0.09 diluted loss per share, for the second quarter of 2010.
Second Quarter 2011 and Recent Highlights
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In May, Enzon appointed Ana 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. |
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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. |
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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. |
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During the second quarter of 2011, Enzon repurchased 5.1 million shares of outstanding common stock, totaling $54.8 million. As of June 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
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Research and Development |
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The Company’s pipeline research and development expenses were unchanged at $10.1 million for the three months ended June 30, 2011 and 2010. The pipeline consists of the following clinical programs: PEG-SN38 and the mRNA antagonists Hypoxia-Inducible Factor-1α (HIF-1α), Survivin and Androgen Receptor (AR). In addition, the Company has other novel LNA targets in various stages of preclinical research. Included in the 2010 total was a $1.0 million milestone expense related to the HER3 mRNA antagonist. During the second quarter of 2011, the Company decided not to pursue development of three mRNA antagonists and has therefore returned these early stage LNA targets to Santaris in accordance with our license agreement. |
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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 National Cancer Institute (NCI) is sponsoring a Phase I study of PEG-SN38 in combination with Avastin® (bevacizumab injection) in solid tumors. |
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Revenues |
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Royalty Revenue |
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Revenues received from the Company’s royalty products for the three months ended June 30, 2011 were $9.2 million, as compared to $10.6 million for the three months ended June 30, 2010. Royalties on PEGINTRON, marketed by Merck & Co., Inc., continue to comprise the majority of the Company’s royalty revenue and a reported decline in sales of PEGINTRON accounted for essentially all of the decrease in royalty revenue. |
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General and Administrative |
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General and administrative expenses decreased approximately 20 percent to $4.6 million for the three months ended June 30, 2011, as compared to $5.8 million for the three months ended June 30, 2010. The decrease is due in large part to management’s efforts to contain costs and reduce the overhead necessary to support the current size and structure of the Company. Enzon continues to identify and implement efficiencies to reduce ongoing general and administrative expenses. Meanwhile, the effects of the fourth-quarter 2010 restructuring and the first-quarter 2011 consolidation of facilities at the Company’s Piscataway location are expected to generate further savings over the remainder of 2011. |
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Contracted Services |
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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. |
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Cash and Investments |
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Total cash reserves, which include cash, cash equivalents, short-term investments and marketable securities, were $362.3 million as of June 30, 2011, as compared to $460.1 million as of December 31, 2010. During the second quarter of 2011, the Company expended approximately $54.8 million to purchase 5.1 million shares of its outstanding common stock. Since the inception of a share repurchase program in December 2010 to purchase up to $200 million of its common stock, the Company has purchased a total of 9.0 million shares of its outstanding common stock for a cumulative cost of $96.7 million through June 30, 2011. |
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About Enzon |
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Enzon Pharmaceuticals, Inc. is a biotechnology company dedicated to the research and development of innovative therapeutics for cancer patients with high unmet medical needs. Enzon’s drug-development programs utilize two platforms - Customized PEGylation Linker Technology (Customized Linker Technology®) and third-generation mRNA-targeting agents utilizing the Locked Nucleic Acid (LNA) technology. Enzon currently has four compounds in human clinical development and multiple novel LNA targets in preclinical research. Enzon receives royalty revenues from licensing arrangements with other companies related to sales of products developed using its proprietary Customized Linker Technology. Further information about Enzon and this press release can be found on the Company’s website at www.enzon.com. |
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Forward Looking Statements |
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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 U.S. Securities and Exchange Commission, including Enzon’s most recent Annual Report on Form 10-K for the year ended December 31, 2010. These factors should be considered carefully and readers are cautioned not to place undue reliance on such forward-looking statements. No assurance can be given that the future results covered by the forward-looking statements will be achieved. All information in this press release is as of the date of this press release and Enzon does not intend to update this information. |
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ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
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Three months ended |
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2011 |
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2010 |
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Revenues: |
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Royalties |
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$ |
9,172 |
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$ |
10,588 |
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Contract research and development |
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231 |
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2,602 |
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Miscellaneous revenue |
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196 |
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527 |
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Total revenues |
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9,599 |
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13,717 |
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Operating expenses: |
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Research and development – pipeline |
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10,061 |
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10,131 |
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Research and development – specialty and contracted services |
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184 |
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1,759 |
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General and administrative |
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4,627 |
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5,772 |
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General and administrative – contracted services |
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54 |
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421 |
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Restructuring charge |
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674 |
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710 |
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Total operating expenses |
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15,600 |
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18,793 |
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Operating loss |
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(6,001 |
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(5,076 |
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Other income (expense): |
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Investment income, net |
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386 |
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811 |
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Interest expense |
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(1,479 |
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(1,480 |
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Other, net |
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31 |
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(31 |
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Total other expense |
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(1,062 |
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(700 |
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Loss from continuing operations, before income tax expense (benefit) |
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(7,063 |
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(5,776 |
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Income tax expense (benefit) |
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5 |
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(205 |
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Loss from continuing operations |
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(7,068 |
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(5,571 |
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Loss from discontinued operations, net of income tax |
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— |
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(51 |
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Net loss |
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$ |
(7,068 |
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(5,622 |
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Loss per common share |
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Basic and diluted |
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$ |
(0.13 |
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$ |
(0.09 |
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Weighted average shares – basic and diluted |
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53,054 |
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60,849 |
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4
ENZON PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
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June 30, 2011 |
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December 31, 2010 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
317,867 |
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$ |
397,530 |
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Short-term investments |
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41,083 |
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31,170 |
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Other current assets |
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4,189 |
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5,916 |
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Total current assets |
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363,139 |
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434,616 |
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Property and equipment, net |
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19,485 |
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21,574 |
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Marketable securities |
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3,316 |
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31,394 |
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Other assets |
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759 |
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1,273 |
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Total assets |
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$ |
386,699 |
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$ |
488,857 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
1,430 |
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$ |
4,192 |
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Accrued expenses and other |
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11,050 |
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14,195 |
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Total current liabilities |
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12,480 |
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18,387 |
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Notes payable |
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134,499 |
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134,499 |
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Other liabilities |
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4,266 |
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4,114 |
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Total liabilities |
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151,245 |
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157,000 |
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Stockholders’ equity |
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235,454 |
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331,857 |
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Total liabilities and stockholders’ equity |
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$ |
386,699 |
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$ |
488,857 |
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Common shares outstanding |
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50,632 |
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58,818 |
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